October 19, 2020

TikTok threatens legal action against Trump’s executive order


Nicolas Economou | NurPhoto | Getty Images

TikTok threatened legal action against an executive order issued by President Donald Trump that would ban the Chinese social media app from doing business with U.S. firms.

The app has been at the center of an escalating technology war between the U.S. and China. Washington had already threatened to ban TikTok in the U.S. due to national security concerns.

It said the app could allow Beijing to spy on U.S. government employees and contractors, collect personal data for blackmail, conduct corporate espionage and be used for “disinformation campaigns” that benefit the Chinese government.

TikTok has denied the allegations, and Beijing has opposed the executive orders, saying it will defend the legitimate rights and interests of Chinese businesses.

‘No due process’

TikTok said it was “shocked” by the order, claiming there has been “no due process or adherence to the law” from the Trump administration.

“This Executive Order risks undermining global businesses’ trust in the United States’ commitment to the rule of law, which has served as a magnet for investment and spurred decades of American economic growth,” TikTok said in a blog post.

“And it sets a dangerous precedent for the concept of free expression and open markets. We will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly — if not by the Administration, then by the US courts.”

TikTok, which is owned by Beijing-based internet giant ByteDance, wasn’t the only Chinese company targeted by the Trump administration Thursday. Another executive order was directed at WeChat, the popular messaging app owned by Tencent, claiming its data collection could give Beijing access to Americans’ personal information. Tencent’s share price was down 4.5% in Friday’s premarket,

The bans on TikTok and WeChat are set to take effect in 45 days.

Tencent is arguably a more significant target than ByteDance as its WeChat app is used by millions internationally and the company owns or invests in several major U.S. gaming companies including Riot Games, Epic Games and Activision Blizzard, whose share price was down 1.5% in Friday’s premarket.

It’s still not clear whether the order could affect Tencent’s other business dealings.

“We are reviewing the executive order to get a full understanding,” the company told CNBC’s Eunice Yoon in a statement.

TikTok has become a global cultural phenomenon and is especially popular with teens and young adults, who use it to share short-form videos including everything from lip-syncing to comedy.

Despite being Chinese-owned, TikTok has a U.S. CEO and its largest office is based in Los Angeles. ByteDance operates a separate version of the app for China called Douyin.



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