TikTok is poised to outlast Trump and to test Biden

TikTok’s future is the hands of Biden, who has said little about the company or the broader concerns about influence of Chinese tech companies

TikTok is about to outlast President Donald Trump. Now, the company could become an early test of President-elect Joe Biden’s stance toward Chinese tech companies.

Trump demanded last year that TikTok’s Chinese owner, ByteDance, sell the viral video app. He said TikTok raised urgent national security concerns, on the grounds that the Chinese government could get access to users’ data. The dispute disrupted the app’s stratospheric rise.

ByteDance and the Trump administration are still talking, people familiar with the matter said. But it looks increasingly likely that the fate of the app will not be decided by Trump, who announced his demands with great fanfare over the summer, backed away from a deal he approved a month later and then turned his attention elsewhere.

Instead, TikTok’s future will fall into the hands of Biden, who has said little about the company or the broader, bipartisan concerns about the growing influence of Chinese technology companies.

On Tuesday, the US government agreed to extend a deadline in a court battle over restrictions targeting TikTok. The new deadline is February 18 — almost a month after Biden takes office.

Read | How Joe Biden became a steady hand amid so much chaos

“My gut is that they’re hoping to ride this out and hope that this is on the back burner, and they can kind of skirt by under the radar,” Samm Sacks, a fellow at think tank New America, said about ByteDance’s approach to the final days of the Trump administration.

Biden has said America must be tougher toward Beijing, calling China’s president, Xi Jinping, a “thug.” But he has offered few details about how that approach would play out. He has said only that he will try to have a more consistent policy toward the country — in contrast to Trump’s patchwork aggression — while pressuring it on issues like its theft of American intellectual property.

A spokesman for Biden’s transition team declined to comment on the president-elect’s plans. TikTok declined to comment.

A spokeswoman for the Treasury Department said in a statement that the risks associated with the app “have not changed, and the order requiring the divestiture stands.”

The government has been working with ByteDance and others to resolve the concerns, the spokeswoman said, adding, “That work continues, and the attorney general is authorized to take any steps necessary to enforce the order.”

TikTok is far from the only company with a stake in Biden’s approach to Chinese technology giants, which have increasingly tried to reach customers around the world. Trump’s administration spent years pressing US carriers and its allies abroad to drop Chinese telecom equipment from 5G wireless networks. It tried to keep crucial equipment from Chinese semiconductor makers. Then it turned its gaze to consumer apps, trying to ban TikTok and WeChat and forcing the sale of dating app Grindr.

This month, Trump banned Alipay, owned by a branch of Chinese giant Alibaba, and a collection of other apps. The bans don’t take effect for 45 days, meaning designing and putting them in place will fall to Biden’s administration.

TikTok has soared in popularity in the last year, particularly among younger users, who record lip-sync videos, comedy bits and riffs on other videos. TikTok says the national security concerns are unfounded, noting that its data is stored in the United States, with a backup in Singapore.

Trump’s efforts to pry the service from its Chinese parent company began this summer when he issued two executive orders targeting the app. One barred American firms from working with the app, effectively banning it. A second-order demanded that ByteDance sell the app. The approach gave the government leverage: If the company made the sale, the administration would nix the other restrictions.

Read | Trump bequeaths Biden an upended world

In September, ByteDance announced that it had reached a deal it hoped would satisfy the US government. Software giant Oracle and Walmart would take their own stakes in TikTok, Oracle would manage the data that flows over the app, and leaders at the service would be American citizens.

Trump said Sept. 19 that he approved of the deal. But then he backtracked, expressing concerns that it would not put enough of the app’s ownership in American hands. The talks to complete the deal have continued ever since.

TikTok received multiple extensions from the Committee on Foreign Investment in the United States, a group of federal officials who vet deals involving international companies. The Trump administration decided it would not extend the deadline beyond Dec. 4 but has declined to act on the time limit. Under Trump’s executive order, the Justice Department has the authority to enforce his demands.

Federal judges have also put the administration’s ban on hold, eliminating some of its leverage over the app. The government has appealed the rulings.

Walmart declined to comment. Oracle did not respond to a request for comment.

Some people on ByteDance’s side of the negotiating table believe there are advantages to getting a deal done before Trump leaves. It would give the company more certainty about the app’s future, rather than waiting to see what Biden would do.

Read | On day one, Biden moves to undo Trump’s legacy

At the moment, if ByteDance wants to delay a deal beyond the Trump administration, “they don’t have to do anything, and they can outlast him,” said James Lewis, director of the Strategic Technologies Program at the Center for Strategic and International Studies. He said that if the administration launched a legal effort to force the sale of the app, ByteDance would “just stall it in court.”

But TikTok’s fate under Biden is far from certain.

If he wanted to offer TikTok some immediate relief from the pressure, Biden could rescind the executive order that was designed to cut it off from US companies. He could also rescind the order commanding ByteDance to sell the app.

Biden’s administration could also consider a wider range of measures, short of an outright sale, to mitigate the federal panel’s concerns about TikTok, experts said.

That may take time. The new administration is still staffing important positions that would tackle the issue, meaning it could be months before ByteDance is able to resolve the government’s divestiture order. And without rescinding the policies aimed at TikTok, the Biden administration might find it hard to back down from the government’s defense of those policies in court.

Biden could also decide to pursue a harder line against the app as he looks to balance a desire for a coherent China policy with pressure from lawmakers from both parties who worry about the risks associated with Chinese tech companies.

While the talks between ByteDance and the government continue in private, TikTok has maintained its lobbying effort to convince government officials they have nothing to fear from the app, which uses the cheery slogan “Make Your Day.”

On Dec. 18, the company sent an edition of its email newsletter for policymakers in Washington. It reported that small businesses in Austin, Texas, were using the app to reach customers, that the company was donating $10 million to academic institutions that have public health programs, and that the service had updated its terms of service to better police bullying.

The footer of the newsletter ended with the same message it always does: “We hope this made your day.”