TikTok is saved in the U.S. for now; Biden could change U.S. policy on Huawei and net neutrality
Today was supposed to be the day when the U.S. Commerce Department was going to shut down short-form video app TikTok in the U.S. The extremely popular app, owned by China's ByteDance, is considered a national security threat in the states because of its Chinese heritage. The U.S. government believes that TikTok's U.S. app collects personal and corporate data from American companies and consumers and sends it to Beijing.
Will a Biden administration allow Chinese tech firms like Huawei to compete in the U.S.?
An executive order signed by President Donald Trump in August would have forced Apple to remove TikTok from the App Store and prevent Amazon and Google parent Alphabet from hosting the website which helps create and stream videos lasting 15 seconds to 60 seconds in length. Used mostly by teens, TikTok creators sing, dance, protest, create comedic clips, and more.
Trump has been trying to get ByteDance to divest the U.S. operations of TikTok and while the outlines of a deal between Oracle, Walmart and DanceByte were given a preliminary approval by the president, no deal was finalized. As a result, starting today, November 12th, U.S. companies were supposed to stop doing business with TikTok and the app was scheduled to be banned from the Apple App Store and the Google Play Store. But as the Wall Street Journal reported today, a preliminary injunction preventing the ban from taking place was issued by U.S. District Judge Wendy Beetlestone at the beginning of this month. And the Commerce Department cited that ruling today as a reason for not following through on its own plan to shutdown the app in the states. The Commerce Department says that its shutdown order won't go into effect "pending further legal developments."
TikTok has a couple of its own cases pending. One case seeks an injunction against being shutdown; unlike the case before Judge Beetlestone which gave ByteDance and TikTok temporary relief, TikTok is looking for a more permanent solution from U.S. District Judge Carl Nichols in Washington. Judge Beetlestone stated that the government's action "presents a threat to the 'robust exchange of informational materials' and most likely exceeds what the government is entitled to do under the International Emergency Economic Powers Act. This is the Act that the president says gives him the authority to ban TikTok in the U.S.
In appeals court, TikTok recently said that ByteDance has submitted its fourth version of a proposal designed to create a new company that would be 20% owned by Walmart, 20% by Oracle and 60% by ByteDance that would meet the President's demand for a divestiture. This new company would be responsible for handling TikTok's U.S. consumer data and content. The idea is to have this personal information and content in the hands of an American company rather than a Chinese one. But with the president somewhat sidetracked at the moment. the Commerce Department's decision to shelve the TikTok ban for the moment doesn't seem to bother Trump at all.
Once the Biden administration takes over on January 20th we wonder whether the U.S. position toward Chinese tech companies including ByteDance will change. Will the U.S. reverse the bans against Huawei that prevent it from accessing its U.S. supply chain including Google Mobile Services? Will the export rules that prevent Huawei from being shipped chips manufactured by foundries using American technology disappear? Will U.S. consumers and smartphone fans get a shot at purchasing Huawei devices in the U.S.?
Sources say that on the day he takes over the presidency, President-elect Biden plans on reversing many of the changes made by Trump via executive orders. Another change we could see would be the return of net neutrality. The Obama-era rule required that all data streams be treated the same. In other words, a carrier or ISP can not speed up or slow down certain data streams for financial rewards. Current FCC Commissioner Ajit Pai, appointed by Trump, removed net neutrality from the FCC rule books even though the majority of American consumers wanted to keep it.