United States President Donald Trump has ordered TikTok’s parent company ByteDance to divest its U.S. assets within 90 days as part of the White House’s efforts to put pressure on the Chinese company.
Trump issued the latest order Friday (August 14) on top of the previous executive order that commands U.S. businesses not to transact businesses with the Chinese company citing national security concerns.
This latest order comes in the heels of ongoing talks between technologies giant Microsoft and ByteDance who earlier announced that they will come up with a possible agreement for an ownership transfer by September 15.
Earlier this month, Bytedance and Microsoft announced they are in talks to sell TikTok not only in the United States but also in Australia and New Zealand.
The latest order gives enough time for ByteDance to reach a fruitful discussion and agreement for the company to divest its ownership of TikTok in the U.S. to an Ameican company.
The Chinese company has also threatened legal action against Trump’s order claiming it was issued without due process.
In an order furnished to White House media on Friday, Trump said there is ‘credible evidence’ that Bytedance might take action that will threaten to impair national security in the United States.
The order prohibited the transaction resulting in the acquisition as well as the ownership of Musical.ly by ByteDance.
ByteDance Ltd. acquired American-owned Musical.ly Inc. on November 9, 2017, and merged it into TikTok on August 2, 2018. Musical.ly Inc. later changed its name to TikTok Inc. growing into a popular short-form video app worldwide.
U.S. President Trump in the order said:
“In order to effectuate this order, not later than 90 days after the date of this order, unless such date is extended for a period not to exceed 30 days, on such written conditions as the Committee on Foreign Investment in the United States (CFIUS) may impose, ByteDance, its subsidiaries, affiliates, and Chinese shareholders shall divest all interests and rights.”
The recent order states that ByteDance should divest any assets used to support Bytedance’s operation of TikTok in the U.S. including data obtained or derived by TikTok from the application’s users. Data acquired should also be destroyed once ByteDance divests its U.S. assets.
The latest order also gives authority to U.S. officials particularly the Committee on Foreign Investments in the United States to dig into the books and information systems of the company as well as ensure that TikTok transfers ownership to an American citizen or a company owned by Americans.
Earlier this month, President Trump expressed wariness that TikTok would easily give the Chinese government access to data collected from U.S. nationals which the Chinese company denied repeatedly.
Aside from TikTok, Trump also issued an executive order asking U.S. business not to transact business with Chinese tech giant Tencent’s popular messaging application WeChat.
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