TikTok ban: Here’s the latest on the app’s fate

A US ban on TikTok could start on Sunday.Maybe.

There have been so many twists and turns in the saga of the app that each development can feel as fleeting as its 15-second videos.

On Thursday, a US judge ordered the Trump administration to either postpone itsban on TikTok or respond by Friday afternoon to a request from the app’s parent company, ByteDance, to temporarily block the ban.

People walk past the ByteDance headquarters building on August 25, 2020 in Beijing, China. (Photo by VCGG)

Related article New Chinese rules could complicate a sale of TikTok's US business

Beijing also still needs to weigh in on a deal that would see Oracle (ORCL) and Walmart (WMT) invest in a new US-based entity, TikTok Global. And US President Donald Trump said Monday that American companies need to control the service, otherwise “we’re not going to approve the deal.”

So the saga is far from over. But the outcome could set the tone for the future of US-China relations and create a precedent for businesses trying to navigaterising tensions between the world’s two largest economies.

Who will own TikTok?

Trump has for weeks threatened to ban TikTok, which is owned by China’s ByteDance, on national security grounds unless an American company takes control of its US operations. TikTok has roughly 100 million users in the United States, and Trump claims the app gives Beijing access to the personal data of Americans.

TikTok has denied those allegations. The company has said its data centers are located entirely outside of China and that none of that data is subject to Chinese law.

ByteDance Ltd.'s TikTok app is displayed in the App Store on a smartphone in an arranged photograph taken in Arlington, Virginia, U.S., on Monday, Aug. 3, 2020.

Related article TikTok and WeChat downloads soar ahead of ban

Last weekend, Trump gave his blessing to a deal that would give Oracle and Walmart a combined 20% stake in TikTok Global, which would be headquartered in the United States and operate the app. Four of the company’s five board members would be Americans, Oracle and Walmart said in a joint statement.

ByteDance said in a statement that TikTok Global’s board also “includes the founder of ByteDance … as well as the CEO of Walmart.”

But there is still a lot of confusion over TikTok’s proposed ownership structure should the deal go forward.

While the initial announcement implied that ByteDance would continue to own the remaining 80% of TikTok, Oracle executive vice president Ken Glueck said on Monday that ByteDance will not own any part of the viral video app.

“Americans will be the majority and ByteDance will have no ownership in TikTok Global,” said Glueck.

In aseparate statement Monday, ByteDance claimed that TikTok would be “a 100% owned subsidiary of Bytedance.” But a person familiar with the deal said that was inaccurate.

According to the person familiar with the deal, TikTok Global will be partially owned by ByteDance’s international and Chinese investors, but ByteDance itself will hold zero percent of the new company. Oracle and Walmart’s investment will take US ownership of TikTok Global to just over half, with ByteDance’s investors holding the rest.

Who needs to sign off on the deal?

Trump has positioned himself as the kingmaker of any TikTok deal, making clear that he must agree to the terms before anything is made official.

If that seems unusual, it’s because it is. While governments often vet pending deals to protect consumers from monopoly power, and often weigh national security when a merger is announced, Trump’s deep involvement is a stark departure from how deals are typically finalized — as is his move to compel a sale in the first place.

“In the end, Trump is the X-factor,” Dipayan Ghosh, the co-director of the Digital Platforms and Democracy Project at the Harvard Kennedy School, told CNN Business late last week.“Whatever he wishes will happen, no matter the merits of the related set of policies underlying the proposal.”

But the deal also needs the green light from Beijing.

Last month, Chinese regulators introduced new rules that govern the sale of certain kinds of technology to foreign buyers — a change that experts pointed out would likely require ByteDance to obtain government permission before selling TikTok to a foreign company.

In this photo illustration a TikTok logo is seen displayed on a smartphone.

Related article Chinese state media slams TikTok deal as 'dirty' and 'unpalatable'

ByteDance has said that Oracle would be able to review the app’s source code, but that the deal does not involve the transfer of its algorithms and technologies.Even so, the Chinese company said Thursday that it has applied to the Chinese government for a license to export its technology,according to a statement posted on an official Chinese social media account run by ByteDance. Officials from China’s Ministry of Commerce confirmed to CNN Business that they had received the firm’s license application.

A source familiar with the negotiations told CNN Business earlier this week that ByteDance wasn’t concerned about regulatory approval.

But the deal has also received aggressive pushback from Chinese state media. State-run outlets are a powerful tool in the country’s propaganda machine, and the various outlets and their editorials are often viewed as barometers of sentiment among senior officials.

“US’ highway robbery of TikTok completely violates market principles and the spirit of the rule of law. It is a distorted hegemonic behavior under the forced intervention of the US government,” wrote the editorial board of the Global Times, a hawkish state-run tabloid. Friday’s editorial was one of a few the publication released this week in opposition to the deal.

“What the United States has done to TikTok is almost the same as a gangster forcing an unreasonable and unfair business deal on a legitimate company,” the newspaper China Daily wrote in an editorial published Wednesday, which called the deal a “dirty and underhanded trick.”

I use TikTok. What does it mean for me?

As the situation continues to evolve, TikTok’s tens of millions of US users worry they could lose access to one of their favorite products.

Under the terms of the threatened ban, people who already had TikTok on their phones could still post short videos of dances, fun recipes and comedy routines per usual, but no new downloads of the app would be allowed. US users also wouldn’t be able to receive security patches or other updates, which could cause outages or glitches in the future.

Though a ban has been averted for now, fears about restrictions have alreadysent TikTok downloads soaring. They rose 12% to 247,000 in the United States last Friday, compared to the day before, according to preliminary estimates from Sensor Tower, a research firm.

— Laura He, Selina Wang, Brian Fung, Charles Riley and Julia Horowitz contributed to this report.