ByteDance Group’s TikTok, an overseas version of Chinese short video sharing app Douyin, faces an existential crisis in the United States, as murmurs of a “crackdown” from the White House forced the Chinese company to engage in talks on selling its US business to Microsoft.
TikTok is the fastest-growing registered global mobile internet app, with more than 100 million users, and its rapid growth, especially in the US, is seen as a threat to Facebook. The US government has long viewed globally competitive Chinese high-tech companies including Huawei as a threat and done whatever it could to crack down on them in the name of “national security”.
The US government has not introduced any specific policy against TikTok, only threatened it through a number of vague statements.
According to the latest media reports, Microsoft is prepared to press ahead with the negotiations to take over TikTok’s US operations and complete the negotiations by Sept 15, following talks between Microsoft CEO Satya Nadella and US President Donald Trump.
This means that TikTok will have to hand its fate over to some unpredictable power, and even have to sell its assets without the option of setting a price.
The US government has failed to find a reasonable legal excuse to deal with TikTok. All private data of TikTok’s US users are stored in the US and are unlikely to be transferred. TikTok’s US management and staff include people from the US, and US investors also own a significant proportion of its equity. Considering the US government is trying to deal with TikTok in a political way, Tik-Tok should consider incorporating the dispute into the US legal process to assert its legitimate rights and interests.
TikTok’s core value lies in its unique algorithms, a product of artificial intelligence that incorporates the expertise of Chinese engineers and programmers with high-value intellectual property.
The US government’s move, which has forced ByteDance to sell TikTok to a US company, is akin to a forced technology transfer and an example of the US’ open seizure of Chinese intellectual property.
If ByteDance sells TikTok to a US company for “security reasons”, that would set a dangerous precedent, motivating other countries where TikTok operates to follow the US administration’s example and spark a chain reaction.
ByteDance is a young Chinese private company that cannot deal with a political game played by the US. But as a Chinese company that has gone global, ByteDance has reasons to take up legal means to defend its legitimate rights. The Chinese government can also consider examining whether the technology transfer in the deal violates China’s law and harms the country’s national interests.