China says it won’t approve TikTok sale, calls it ‘extortion’
The September 20 deadline for a purported TikTok sale has already passed, but the parties involved have yet to settle terms on the deal. ByteDance and TikTok’s bidders Oracle and Walmart presented conflicting messages on the future ownership of the app, confusing investors and users. Meanwhile, Beijing’s discontent with the TikTok sale is increasingly obvious.
China has no reason to approve the “dirty” and “unfair” deal that allows Oracle and Walmart to effectively take over TikTok based on “bullying and extortion,” slammed an editorial published Wednesday in China Daily, an official English-language newspaper of the Chinese Communist Party.
The editorial argued that TikTok’s success - a projected revenue of about a billion dollars by the end of 2020 - “has apparently made Washington feel uneasy” and prompted the U.S. to use “national security as the pretext to ban the short video sharing app.”
The official message might stir mixed feelings within ByteDance, which has along the way tried to prove its disassociation from the Chinese authority, a precondition for the companies’ products to operate freely in Western countries.
Beijing has already modified a set of export rules to complicate the potential TikTok deal, restricting the sale of certain AI-technologies to foreign companies. Both ByteDance and China’s state media have said the agreement won’t involve technological transfers.
The Trump Administration said it would ban downloads of TikTok, which boasts 100 million users in the country, if an acceptable deal was not reached. It also planned to shut down Tencent’s WeChat, a decision just got blocked by a district court in San Francisco.
TikTok has collected nearly 198 million App Store and Google Play installs in the U.S. while WeChat has been installed by nearly 22 million users in the U.S. since 2014, according to market research firm Sensor Tower. Unlike TikTok, which has a far-reaching user base in the U.S., WeChat is mainly used by Chinese-speaking communities or those with connections in China, where the messenger is the dominant chat app and most Western alternatives are blocked.
Right before the proposed September 20 deadline for the app bans, China’s Commerce Ministry called on the U.S. to “give up its bullying acts” towards the video app and messenger or face Beijing’s countermeasures to “safeguard the legitimate rights and interests of Chinese companies.”
After the U.S. announced a series of detrimental curbs on telecoms equipment giant Huawei last year, China vowed to publish an “unreliable entity list” targeting foreign companies and individuals that “do not comply with market rules” and “seriously damage the legitimate rights and interests of Chinese enterprises,” but it has yet to reveal the list.