Judge blocks U.S. order to remove WeChat from app stores

Yolanda Curtis
September 20, 2020

Under the proposed deal that would involve the app owner ByteDance Ltd., U.S. software company Oracle Corp. and retailer Walmart Inc., security will be "100 percent", Trump told reporters, adding, "I can say that I have given the deal my blessing".

It was also stated that China is yet to approve the deal, although regulators are said to have expressed support for any transaction in which BtyeDance still maintains control of its valuable recommendation algorithms and other proprietary technology.

According to a source close to the matter, ByteDance would keep the rest of the shares.

The Commerce Department did not respond immediately to a request for comment. The TikTok Global deal does not include the app's China twin, Douyin, which has become an enormous hit in its own right. Beijing previously announced the addition of several artificial intelligence technologies, including "personalized content recommendations based on data analysis", to its list of restricted exports, which created a major roadblock for ByteDance to sell TikTok's US operations. "We're pleased that today we've confirmed a proposal that resolves the Administration's security concerns and settles questions around TikTok's future in the U.S". That company would have a majority of American directors, a U.S. chief executive and a security expert on the board.

The Trump administration had ordered a ban on downloads of video-sharing app TikTok as well as messaging platform WeChat, both owned by Chinese companies.

WeChat had about 3.3 million monthly active users in the United States as of August, according to analytics provider App Annie.

Some aspects of the deal caught ByteDance by surprise, Reuters noted - the Chinese firm said on September 20th that it first heard of the education plans at the same time the deal was announced.

"The company has been and will continue to negotiate with the US government and other USA stakeholders to reach a long-term solution", the statement said.

As a part of the deal, TikTok will become TikTok Global, a technology company that is based in the US. "They'll be using separate clouds and a lot of very, very powerful security", Trump said. Tencent, the conglomerate that owns WeChat, had previously described the United States ban as "unfortunate".

In early August, he gave ByteDance until September 20 to hand over TikTok's USA operations to an American company.

Judge Beeler also said that specific evidence cited by the government to show WeChat posed a national security threat was "modest". Although Bytedance will retain an 80% stake in the new company, because existing USA investors hold a 40% stake in ByteDance, the math works out to 53% ownership by USA companies and investors What We Don't KnowWhat China thinksThe Chinese government will also have to approve ByteDance's plans under new restrictions Beijing imposed on the export of artificial intelligence technologies, Bloomberg News reported earlierAs of earlier this week, ByteDance was growing increasingly confident that the proposal would pass muster with Chinese regulators, people familiar with the matter told BloombergEarly reaction from Chinese state media appeared positive.

Other reports by iNewsToday