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ByteDance Ltd., the Chinese owner of TikTok Inc., has a new December deadline to file documents as part of its court petition seeking to block a US government forced sale of the video sharing app.
The United States Court of Appeals in Washington on Thursday set the dates of December 14 and 28 for ByteDance and the Trump administration to file motions and other documents in the case.
On Thursday, ByteDance had to meet a deadline to comply with an order from President Donald Trump to sell the US operations of TikTok. While the company received tacit approval from the Trump administration about two months ago on a deal to sell part of TikTok to Oracle Corp. and Walmart Inc., the deal was never finalized. It was stuck in limbo for weeks and was quickly overshadowed by the US elections. The delay prompted TikTok to go to the appeals court on Tuesday to prevent a forced sale.
Trump’s order requiring a sale by November 12 allows for a 30-day extension of the deadline, but the new dates go beyond that period. The Commerce Department said Thursday it will not enforce its order to shut down TikTok if a sale is not reached within the deadline, citing a federal court ruling in Pennsylvania last month, according to the Wall Street Journal. Attorneys for TikTok and officials from the Treasury Department, which is overseeing the sale, and the Department of Commerce did not immediately respond to a request for comment.
Trump made the fight for TikTok a central front in a broader trade war with China, notably an effort to crack down on the growing influence of the Chinese tech industry in the U.S. Trump first ordered a sale of TikTok in August and threatened to ban the app if ByteDance fails to reach an agreement with an American company. Since then, the proposed ban has been delayed twice, most recently on October 30, when a Pennsylvania judge issued a temporary injunction in response to a lawsuit filed by a group of TikTok users who make their living through the ‘app.
TikTok is one of the most popular apps in the world – with over 100 million US users – and is also ByteDance’s premier service outside of China. The company and its investors are desperate to strike a deal to avoid a ban in what has been a valuable market for other social media apps, such as Facebook Inc.’s Instagram and Snap Inc.’s Snapchat.
The way the original order was worded appears to require a divestment from ByteDance to be in place by the deadline, not just a deal. If the government reaches an agreement with the company, it could exercise discretion over the timing of enforcement, said Aimen Mir, a partner of Freshfields Bruckhaus Deringer and former assistant assistant secretary for investment security at the Treasury, where he handled reviews for the Committee. on Foreign Investments in the United States
“Usually when there is a prolonged silence from CFIUS, it suggests that there is no clear consensus within the government on what the next step would be, but this has been an atypical case for a while,” he said. said Mir.
If an extension has not already been granted, Mir said the Justice Department should go to court and demand the execution of the divestment order.
Trump’s August executive order does not provide a clear punishment for failing to divest, but states that “the attorney general is authorized to take all necessary steps to enforce this order.”
“There could be fines, or it could be draconian as a ban if the administration wanted to go that far,” said Carl Tobias, a law professor at the University of Richmond. “But the government still has until midnight on November 12 to issue an extension, which is a plausible scenario.”
This sales process was originally brought about due to national security concerns. The US government is concerned about ByteDance’s access to personal data of US citizens.
Cifius, the Treasury Department’s panel examining foreign acquisitions of American companies, said in a July 30 letter included in ByteDance’s court filing that its security concerns were based on both classified and unclassified information. The letter cited the move by a Chinese subsidiary of ByteDance in 2017 to establish a Communist Party Committee in its governance structure and pointed out that ByteDance also collaborates with public security offices across China.
“The Treasury Department remains focused on achieving a resolution of national security risks arising from ByteDance’s acquisition of Musical.ly,” a Treasury spokesperson said in a statement, referring to the 2017 purchase of a app that ByteDance merged with TikTok. “We have been clear with ByteDance about the steps required to achieve this resolution.” The Justice Department declined to comment.
Trump’s order calling for the sale of TikTok underscored the aggressive stance his administration has taken towards Chinese investment in the U.S. Only seven foreign acquisitions of American companies have been blocked or canceled by U.S. presidents since 1990 and Trump is responsible for four of them.
Now, the TikTok deal, once a priority for the administration, has taken on less urgency in recent weeks as Trump has turned his attention to his candidacy for re-election and, since last week, has contested the outcome of the vote of the November 3.
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