It may be that TikTok is not selling quickly enough in the United States. In this regard, the US government stated that TikTok needs to reach an agreement with the acquirer before September 15 or it will close TikTok’s business in the United States.
Chinese short video app, TikTok, is at the hub of a number of controversies including suspicious data collection practices. In a recent turn of events, the U.S. is threatening to ban TikTok if it does not sell its US business to an American company before September 15th. According to the U.S. President, the purchase of TikTok by an American company must be beneficial to the U.S. This means that the deal may have to include some sort of royalty payable to the American government. Until recently, it appeared that all is in place for an American company to take over the Chinese business.
Nevertheless, a new report out of China suggests that this deal will not be a smooth ride. The Chinese government has imposed new restrictions on the export of AI technologies, this includes TikTok. The new export control requires ByteDance to get approval from the Chinese government before selling TikTok’s U.S. business.
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Of course, with the latest development, your guess can be as good as mine – the Chinese government probably wants to block the TikTok sale to an American company.
According to a recent official US statement, it doesn’t matter if Microsoft or other secure US companies acquire TikTok. Unless Microsoft or other American companies can purchase TikTok and conclude a deal, TikTok will be forced to close its US business on September 15th. In addition, as part of the deal, (the buying company) should quickly pay “large amounts of money” to the federal government.
China may want to block the TikTok sale
China is well aware of the September 15th dateline before it imposed its new restriction. Most likely, the Chinese government does not want the deal to pull through. he new restriction from China will further slow down the discussions for a potential deal. In fact, there are speculations that China may delay the transaction until after the U.S. presidential elections in November.
Some people believe that the United States may violate the constitution with the TikTok deal. There are also reports that the stands of the U.S. feel more like extortion. Firstly, it is strongarming a private business to sell to an American company. In addition, it is also strongarming the American company to pay a huge royalty to the government after the deal. Regarding this deal, there are a couple of pending lawsuits. We will see how all these play out in the coming weeks.