Source: Sina Tech, Thursday, August 27, 2020
ByteDance told TikTok’s engineers that although ByteDance was trying to divest the relevant business, it was necessary to prepare for contingencies should TikTok’s US operations need to shut down.
The reason given from the US side was potential security risks in ByteDance’s handling of users’ personal data. In reality, the American people had embraced TikTok, which had about 100 million monthly active users in the United States.
Amid China-US trade friction, the US repeatedly issued decrees barring Chinese tech companies from operating in America: on August 6, an executive order banned transactions with TikTok and its parent company ByteDance for 45 days; on August 13, the US government announced that the John S. McCain National Defense Authorization Act (NDAA) had formally taken effect, aimed mainly at federal government contracts, officially barring the federal government from contracting with any contractor using goods or services from Huawei, ZTE, Hytera, Hikvision or Dahua.
Original headline: ByteDance tells TikTok engineers to prepare contingency plans for a US shutdown. The original report follows.
According to a person familiar with the matter, on Thursday ByteDance told TikTok’s engineers that, although it was trying to divest the business, contingency preparations were necessary should TikTok’s US operations need to close.
Earlier, the US president had ordered ByteDance to divest TikTok’s US operations, citing potential security risks in its handling of users’ personal data. Per the source, American companies such as Microsoft and Oracle were bidding for TikTok, which said it had about 100 million monthly active users in the United States. ByteDance expected to choose one bidder for exclusive talks as early as Friday.
The August 6 executive order banned transactions with TikTok and ByteDance for 45 days. Per sources, although TikTok had sued over the order, if it reached out to influencers in September it could not earn revenue from advertisers.
While shutting down TikTok in the US would block new users from downloading the app, it remained unclear whether users who had already downloaded it would lose access.
Since the start of the month, ByteDance had been negotiating the sale of TikTok’s operations in North America, Australia and New Zealand, businesses worth perhaps 25 to 30 billion US dollars.
Walmart said on Thursday it would join Microsoft’s bid for TikTok’s US business, hours after TikTok’s new chief executive, Kevin Mayer, said he would step down from the post.
Oracle’s chairman Larry Ellison was one of the president’s few supporters in the tech field; in bidding for TikTok’s assets, Oracle had teamed with some of ByteDance’s investors, including Atlantic and Sequoia Capital.
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