New technology export rules in China could affect TikTok sale to a US company
Chinese officials have changed their rules on exporting technology. So, this is a move that could complicate a potential TikTok sale to a US company.
China updated the country’s export-control rules on August 28. To cover what it considered sensitive technologies. Including, possibly, the popular video apps personalized recommendation engine.
Plans for a TikTok sale may have a new obstacle. With China implementing new rules on AI technology exports. The new export control rules, which focus on technology the Chinese government considers sensitive. So, could mean that TikTok’s parent company. Beijing-based ByteDance, might need a license before it can sell TikTok to an American company.
The updated regulations prohibit exporting technology including text analysis, voice recognition. And content suggestions without a license from the Chinese government. So, ByteDance should “seriously and cautiously” consider halting talks for a sale of TikTok.
President Trump has demanded an American company purchase TikTok’s US business
President Trump signed an executive order August 6th blocking all transactions with ByteDance. And has demanded that an American company purchase TikTok’s US business. The order was intended to take effect within 45 days. Then on August 14th, the president signed an order giving ByteDance 90 days to sell or spin off TikTok in the US. And, the culmination of an investigation of the company by the Committee on Foreign Investment in the US (CFIUS). Which oversees foreign acquisitions of US companies for any potential security risks.
If the ban against transactions were to go into effect. Apple and Google would no longer be able to list the app in their respective app stores.
So far, Microsoft, Oracle and “a third US company” have made bids on TikTok. (Microsoft was pursuing a deal for TikTok’s operations in the US, Australia, Canada and New Zealand.)
But the news about the export-control rules could make corporate shoppers nervous. Because, Beijing’s displeasure alone could scare off TikTok’s suitors. And many of whom have operations in China.
The wildly popular video-sharing platform hit 2 billion downloads globally in April. With 315 million downloads in the first quarter of the year alone.