Sale of TikTok in US one step closer after House of Representatives vote to ban
Steven Mnuchin, who served as Treasury Secretary under ex-president Donald Trump, is putting together an investor group to take over the US arm of TikTok, according to the Financial Times.
Members of the US House of Representatives voted overwhelmingly this week in favour of a bill that could lead to a ban on the social network. The Senate may block the ban, but Democrats and Republicans share similar concerns about Chinese interference. President Biden has already indicated he will sign the bill if it passes.
The only thing left to save TikTok is sale to an American party, as has been suggested under Donald Trump. As then, names of possible buyers are already circulating, such as former Activision Blizzard CEO Bobby Kotick who is also said to have spoken to OpenAI CEO Sam Altman.
Any sale would require China’s approval under export control rules. Last year, Beijing’s Ministry of Commerce already announced that it would firmly oppose a forced sale by ByteDance, TikTok’s parent company.
On Thursday, Chinese Foreign Ministry spokesman Wang Wenbin called the proposed sale ‘robber logic’. After all, with 170 million American users, the app is coming into foreign hands and Bytedance presumably no longer have any say in it.
He Yadong, spokesman for the Ministry of Commerce, called on Washington to “stop unfairly suppressing foreign companies”.
The stakes are huge. TikTok Shop debuted in the US in September and since then, along with third party vendors, generated $1.1 billion in gross revenue.
TikTok has already spent more than $1.5 billion on Project Texas, a restructuring plan to protect US user data from Chinese influence. TikTok is working with US cloud software group Oracle to develop a solution assuaging concerns over surveillance or espionage.
On the other side of the Atlantic there are no such plans in Europe, though there are similar concerns. This week, TikTok was fined €10 million for failing to adequately protect minors. At issue is the worrying trend of young people applying a “French scar” to themselves: pulling hard on their cheeks or scratching to get red marks around their cheekbones. The fine was imposed by the Italian regulator, the AGCM.
It was announced last month that the European Commission had begun an investigation into TikTok’s practices under the Digital Services Act. It wants to investigate whether the Chinese company is doing enough to combat addiction.
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