In the recent months, Chinese apps TikTok and WeChat have been in a back and forth battle with US president Donald Trump, as the relationship between Washington and Beijing frays.
The latest major development came on Friday, when Trump’s administration announced it plans to officially block new downloads of TikTok and WeChat in the US from Sunday, following through on threats to ban the popular apps on national security grounds.
In response, TikTok and parent company ByteDance asked a US judge to block the Trump administration from enacting a ban on the social networking site, citing geopolitics over technology and trade.
With Trump’s latest move the fate of the ByteDance and Tencent (TCEHY)-owned apps looks uncertain.
What does this all mean?
The good news is TikTok and WeChat users who already have the app on their phones, might still be able to use it, even after Sunday’s ban, but they won’t be able to download updates. Anyone who is planning to download the apps after Sunday will not be able to do so.
“The only real change as of Sunday night will be [TikTok users] won’t have access to improved apps, updated apps, upgraded apps or maintenance. In terms of how user access will change, we’ll likely have to wait and see,” US commerce secretary Wilbur Ross said.
Since taking office, Trump has challenged Beijing on technology, military and economic fronts.
While there has been much bickering between who owns the popular video-sharing app, the fight is much deeper.
It also reflects the state of relations between the two countries, amid the coronavirus crisis, an ongoing trade war, technology tiffs over security fears and even Hong Kong — tensions between the world’s biggest economies keep ramping up.
While TikTok, which has over 80 million active users in the US, is best known for its anodyne videos of people dancing and going viral, it was accused by the Trump administration of passing data on American users to the Chinese government.
TikTok denies handing over US data to the Chinese authorities, with China blasting Trump’s ban as political.
Run-up to the ban
In July, the US senate voted unanimously to approve a bill prohibiting federal workers from using TikTok on government-issued devices, amid security fears of data collection.
Trump signed executive orders on 6 August giving US businesses 45 days to stop dealing with ByteDance, unless it divested — due to take effect from midnight on 20 September. The second order requires ByteDance to sell TikTok by 12 November.
As a result, TikTok’s parent company ByteDance spoke to various American suitors, including Microsoft (MSFT) and Twitter (TWTR). But the social media network and the tech giant are no longer contenders, with Microsoft announcing on 13 September that ByteDance had rejected its bid.
On 14 September, enterprise software Oracle (ORCL) said it had won the race but said it would “partner” with TikTok, rather than buy it out-right. The deal still requires approval in both the US and China, and it is unclear whether it will satisfy the terms set out by Trump.
The US president gave Oracle — run by Trump supporter Larry Ellison — his blessing to enter the race before it announced it would.
However, the deal between ByteDance and Oracle could conflict Trump’s executive orders — based on security fears over America data — as it said it will not sell or transfer the source code behind its popular video app TikTok.
Previously, Trump also said that any American company that buys TikTok, will have to pay the US Treasury as a sign of thanks, but there is doubt over the legality of Trump’s request.
Meanwhile, China has revised its catalogue of technologies that are subject to export bans, which could mean the US has to seek Beijing’s approval for a sale by ByteDance. A complication which could cause problems for Trump’s plans.
One measure that might affect TikTok is the restriction of “personalised information recommendation services on data analysis,” with TikTok’s app being built on algorithms that analyse personal behaviour to promote personalised content.
To add fuel to the fire, US treasury secretary Steven Mnuchin said in June that a decoupling could happen between the countries if US companies were not allowed to compete on a level playing field in China.
ByteDance, whose last valuation of $78bn (£61bn) makes it the world's most valuable start-up, is behind the app that is dominating the lives of millennials and generation Z. It only launched in September 2016 but, outside China, it has already amassed 300 million active users and 1.4 billion total installs to date.