TikTok sale: ByteDance applies for China tech export licence amid uncertainty over Oracle-Walmart deal

25-Sep-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

ByteDance has applied for a technology export licence to comply with China’s recently revised tech export rules, amid uncertainty from both the Trump administration and Beijing over its proposed deal with Oracle and Walmart for its US TikTok assets.

The company has submitted an application to Beijing’s municipal commerce bureau and is awaiting a decision, it said in a statement posted on its news aggregator Jinri Toutiao late on Wednesday night.

China’s Ministry of Commerce confirmed at a press conference on Thursday afternoon that Beijing’s Municipal Commerce Bureau had received the tech export licence application from ByteDance. “We will process it according to the relevant laws and regulations,” ministry spokesman Gao Feng said.

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It is unclear when exactly ByteDance applied for the licence, and the Beijing-based company did not immediately reply to a request for comment.

The Chinese Ministry of Commerce said last month that government approval for restricted exports would take up to 45 working days, so if the process was started on Wednesday it may not receive a decision until the end of November, according to the Post’s calculations.

This means that potential approval may not come before Trump’s deadline of November 12, after which the short video app may face further restrictions if a deal is not reached.

ByteDance’s application for the tech export licence comes despite its statement on Monday that the current proposal “does not involve the transfer of any algorithms and technologies”. Oracle will have the authority to access the source code of TikTok USA for security checks, it said in that statement.

The deal faces hurdles in obtaining approval from both the White House and Beijing, with Trump wanting US control to safeguard national security and Beijing reluctant to approve a deal that looks like a US victory.

Trump said on Monday he would not approve a deal between Oracle and TikTok unless the US owners gain control over the popular Chinese-owned, video-sharing app, in a reversal of his statement over the weekend that the deal had his “blessing”.

Meanwhile, China watchers have said that Beijing is unlikely to approve a deal that looks like a loss of face for them and a home run for the US administration.

State-owned media outlets have attacked the transaction in recent commentaries. China Daily called it “dirty and unfair” and said it was “based on bullying and extortion” on Wednesday, while People’s Daily published an opinion piece on Tuesday in which the author said the goal of the forced sale was to seize control of an influential Chinese company and that Trump’s apparent step back was just a “big trap waiting for you to jump”.

The US Commerce Department announced last Friday that new restrictions on TikTok as well as Tencent Holdings’ do-everything app WeChat would take effect starting Sunday. These would block new US downloads of TikTok, while banning WeChat from using services in the US necessary for the app to function.

The TikTok order has been delayed for a week to September 27, with the Commerce Department citing “recent positive developments” in talks over the deal with Oracle and Walmart.

TikTok on Wednesday asked a US judge to block the order, saying the restrictions “were not motivated by a genuine national security concern, but rather by political considerations relating to the upcoming general election”.

A California judge issued a preliminary injunction on Saturday temporarily stalling the ban on WeChat, hours before it was due to be implemented on Sunday, although the Commerce Department said on Monday it will challenge the court’s order.



Category: China

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