TikTok: Everything We Know About App's Future in the US

Lawmakers' concerns about TikTok trace back to when the app first landed in the US in November 2017, when TikTok's parent company ByteDance bought a US-based app called Musical.ly. Musical.ly was shut down in the US a year later, and was merged with TikTok.

Musical.ly was a watered-down version of TikTok: Its capabilities were limited to creating and sharing 15-second lip sync music videos. ByteDance's acquisition of Musical.ly was valued at $1 billion.

Source: Business Insider

China has been a target of the US government since Donald Trump took office in 2016. He's blamed China for the spread of the coronavirus pandemic, and accused Chinese companies of using their products to spy on US citizens for the state government.

Trump in China — Donald Trump, left, and Chinese President Xi Jinping. Artyom Ivanov\TASS via Getty Images

As TikTok's popularity soared in 2019, lawmakers took a closer look at the app's ties to China. They've raised concerns of potential risks to US national security, the privacy of young users, and content moderation.

josh hawley — Republican US Sen. Josh Hawley, who has been one of TikTok's most ardent critics in Congress. Joshua Roberts/Reuters

In 2019, TikTok paid out a $5.7 million fine to the Federal Trade Commission to settle allegations it illegally collected personal information from children under age 13 without parental consent.

Children's privacy advocates have since accused TikTok of breaking the terms of the FTC settlement by failing to alter policies, and refusing to delete videos and other content obtained illegally. As a result, the FTC and US Justice Department are now looking into allegations it failed to live up to its 2019 agreement.

Beyond national security, TikTok has faced allegations it censors certain types videos, including content categorized as political, "culturally problematic," and coming from creators the company says are more prone to bullying.

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A federal investigation was launched in November 2019 via the Committee on Foreign Investment in the United States (CFIUS), a group that has the authority to approve or reject foreign business dealings over national-security risks. The review focused on ByteDance's 2017 acquisition of Musical.ly.

During Trump's presidency, CFIUS has blocked deals in which tech corporations from China and Singapore were poised to take over US-based companies. Last year, CFIUS ordered the Chinese parent company of the gay dating app Grindr to sell the platform because the deal had not been submitted to CFIUS for review when it happened — the same justification for allowing CFIUS to review of the ByteDance and Musical.ly deal.

Source: Business Insider

The Trump administration first publicly said it was considering banning TikTok in the US in early July, although no details were provided about how that would happen. Experts have said there's no identifiable way Trump could legally ban the app in its entirety.

Pompeo Trump — President Donald Trump, left, and U.S. Secretary of State Mike Pompeo. Tuan Mark/Getty Images

In separate comments made in early July, Secretary of State Mike Pompeo cited national security fears as a reason for a potential ban. A few days later, Trump said he was looking to ban the app as a way to punish China over the coronavirus pandemic.

Source: Business Insider

Reports emerged toward the end of July that the Trump administration had begun weighing two actions it could take against TikTok: a nationwide TikTok ban, or an order that ByteDance divest its TikTok operations in the US.

Source: Business Insider

To get ahead of Trump's calls for a ban, ByteDance started exploring the option to sell off TikTok's US operations, and entertained offers from US investors and tech companies. Trump acquiesced, and gave ByteDance until Sept. 15 to finalize a deal to sell off TikTok's US arm.

Trump gave ByteDance until September 15 to find a US buyer. If an acquisition hasn't been finalized by that date, Trump says he'll ban TikTok — although it's unclear how he could do that.

The valuation of TikTok's US operations have been pegged anywhere between $10 billion and $50 billion, a high pricepoint that few US companies could afford. Microsoft is the only company to confirm it has entered conversations with ByteDance.

bytedance microsoft zhang yiming satya nadella — ByteDance CEO Zhang Yiming, left, and Microsoft CEO Satya Nadella. VCG/VCG via Getty Images; Stephen Lam/Stringer/Getty Images

Microsoft has confirmed it's looking to acquire TikTok's operations in US, Canada, Australia, and New Zealand.

Source: Bloomberg, CNBC

Other names in Silicon Valley have been floated as potential buyers, including Oracle and Alphabet. Twitter is reportedly in "preliminary" talks with ByteDance — but the company would have to raise billions to afford TikTok's massive price.

Twitter CEO Jack Dorsey. Drew Angerer/Getty Images

Source: Wall Street Journal

However, it's possible that these acquisition talks for TikTok's US operations could amount to nothing. Reports have indicated that ByteDance is only entertaining US buyers as a way to temporarily appease Trump — but has no plans to sell off its massively popular app.

zhang yiming bytedance — ByteDance founder and CEO Zhang Yiming. Zheng Shuai/VCG via Getty Images

Source: South China Morning Post, Business Insider

Despite ByteDance's offer to sell the app, Trump has taken the offensive. He issued an executive order in early August to bar Americans from making "any transactions" with TikTok or ByteDance, set to take effect in mid-September.

Donald Trump signs an executive order — Trump signs an executive order. Kevin Lamarque/Reuters

Source: Business Insider

A week later, Trump issued a second executive order based on CFIUS's completed review, which concluded "unanimously" that Trump should retroactively unwind ByteDance's Musical.ly acquisition. Trump's executive order extended the deadline for ByteDance to sell off its TikTok US operations until November.

steven munchin — U.S. Secretary of the Treasury Steven Mnuchin. Alex Wong/Getty Images

Source: Business Insider

However, TikTok isn't going away without a fight. TikTok filed a lawsuit Monday against the US government, challenging Trump's August 6 executive order. TikTok will challenge the administration's national-security accusations and assert its right to due process.

TikTok says it will claim it was deprived of due process, afforded under the Fifth Amendment, with Trump's August 6 executive order. The lawsuit also will argue that no evidence has been found to support the Trump administration's accusations that TikTok poses a national security threat and has provided the Chinese government with access to user data.

Trump's executive order could, at the very least, be delayed as the courts review TikTok's lawsuit. TikTok could file an injunction, allowing the delay of Trump's executive order until the lawsuit is complete.

It also remains to be seen whether ByteDance will follow through on its talks to sell off TikTok's US operations. But it seems that the company is waiting to part ways with its 100 million users in the US until it's forced to do so.

zhang yiming net worth bytedance tiktok — ByteDance cofounder & CEO Zhang Yiming. Visual China Group via Getty Images; Ruobing Su/Business Insider

TikTok just sued the Trump administration. Here's everything we know about the app's future in the US — and everything we don't.

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Business Insider tells the innovative stories you want to know

Business Insider tells the innovative stories you want to know

Business Insider tells the innovative stories you want to know

TikTok just sued the Trump administration. Here's everything we know about the app's future in the US — and everything we don't.

Lawmakers' concerns about TikTok trace back to when the app first landed in the US in November 2017, when TikTok's parent company ByteDance bought a US-based app called Musical.ly. Musical.ly was shut down in the US a year later, and was merged with TikTok.

China has been a target of the US government since Donald Trump took office in 2016. He's blamed China for the spread of the coronavirus pandemic, and accused Chinese companies of using their products to spy on US citizens for the state government.

As TikTok's popularity soared in 2019, lawmakers took a closer look at the app's ties to China. They've raised concerns of potential risks to US national security, the privacy of young users, and content moderation.

A federal investigation was launched in November 2019 via the Committee on Foreign Investment in the United States (CFIUS), a group that has the authority to approve or reject foreign business dealings over national-security risks. The review focused on ByteDance's 2017 acquisition of Musical.ly.

The Trump administration first publicly said it was considering banning TikTok in the US in early July, although no details were provided about how that would happen. Experts have said there's no identifiable way Trump could legally ban the app in its entirety.

Reports emerged toward the end of July that the Trump administration had begun weighing two actions it could take against TikTok: a nationwide TikTok ban, or an order that ByteDance divest its TikTok operations in the US.

To get ahead of Trump's calls for a ban, ByteDance started exploring the option to sell off TikTok's US operations, and entertained offers from US investors and tech companies. Trump acquiesced, and gave ByteDance until Sept. 15 to finalize a deal to sell off TikTok's US arm.

The valuation of TikTok's US operations have been pegged anywhere between $10 billion and $50 billion, a high pricepoint that few US companies could afford. Microsoft is the only company to confirm it has entered conversations with ByteDance.

Other names in Silicon Valley have been floated as potential buyers, including Oracle and Alphabet. Twitter is reportedly in "preliminary" talks with ByteDance — but the company would have to raise billions to afford TikTok's massive price.

However, it's possible that these acquisition talks for TikTok's US operations could amount to nothing. Reports have indicated that ByteDance is only entertaining US buyers as a way to temporarily appease Trump — but has no plans to sell off its massively popular app.

Despite ByteDance's offer to sell the app, Trump has taken the offensive. He issued an executive order in early August to bar Americans from making "any transactions" with TikTok or ByteDance, set to take effect in mid-September.

However, TikTok isn't going away without a fight. TikTok filed a lawsuit Monday against the US government, challenging Trump's August 6 executive order. TikTok will challenge the administration's national-security accusations and assert its right to due process.

Trump's executive order could, at the very least, be delayed as the courts review TikTok's lawsuit. TikTok could file an injunction, allowing the delay of Trump's executive order until the lawsuit is complete.

It also remains to be seen whether ByteDance will follow through on its talks to sell off TikTok's US operations. But it seems that the company is waiting to part ways with its 100 million users in the US until it's forced to do so.

Business Insider tells the innovative stories you want to know

Business Insider tells the innovative stories you want to know

Business Insider tells the innovative stories you want to know

Business Insider tells the innovative stories you want to know

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Business Insider tells the innovative stories you want to know

Business Insider tells the innovative stories you want to know

Business Insider tells the innovative stories you want to know

Business Insider tells the innovative stories you want to know