ByteDance need China’s approval to sell TikTok

TikTok: This the Company's Official Statement Following the Ban

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 the TikTok US business to an American company. 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 TikTok.

TikTok US China Microsoft

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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The Chinese government recently added AT technologies like speech and text recognition to the list of export-control products. Furthermore, technologies that analyze personal content are also on the list. According to the Chinese government, this rule is active for foreign transactions to “safeguard national economic security”.

ByteDance will STRICTLY comply with the new rules

According to ByteDance, it will “comply strictly” with the new restrictions. This new rule seems to target the imminent transaction between ByteDance and a U.S. company. This is an unfortunate situation for international businesses. Now, private businesses can not do business freely without the government’s approval. Since the beginning of last year, the U.S. has added tons of Chinese companies in the entity list. American companies will have to get permission from the U.S. government before doing business with these companies.

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The TikTok sale is as good as dead. President Trump gave TikTok until September 15th to sell to an American company or face a ban. With the new law, a review of the deal by the Chinese government will obviously take months. If there will be a response from the Chinese government, it should be after the U.S. presidential elections in November.

Presently, Microsoft, Oracle, Centricus Asset Management Ltd., and Triller Inc. are in contest to acquire TikTok. However, Microsoft and Oracle seem like the most likely to get a deal down. However, with the current situation, nothing is certain. The TikTok sale will cover its business in the U.S., Canada, New Zealand, and other countries. It is valued at about $20 to $30 billion.

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