Trump to Reject TikTok Oracle Deal and Ban TikTok on Sunday

It’s been confirmed that TikTok is going to be banned. Trump said that he was unconvinced his concerns were addressed with the TikTok Oracle deal.

It’s a story with more twists and turns then a pretzel factory. Just two days ago, it seemed like a deal has become a foregone conclusion. Oracle is supposed to become a “partner” with TikTok and move its headquarters to the US. The deal seemed to be a compromise to satisfy both the Trump administration and the Chinese government. Trump didn’t get everything he wanted, but the deal is supposed to sweeten the deal by bringing in tens of thousands of jobs. In fact, things looked so promising, some people speculated that Trump would sign off on it, allowing him to claim some kind of win out of all of this.

All that changed yesterday.

Yesterday, we reported that the Trump administration was skeptical about the Oracle TikTok deal. The reports indicated that, while the administration was reviewing the deal, so-called “security concerns” remained unaddressed. The national security concerns remain pretty much non-existent, but it’s the excuse the administration is using anyway to ban the social media giant.

Now, we are learning that the Trump administration has made a final decision. That decision is to reject the Oracle TikTok deal and ban the platform this Sunday. From CNBC:

The Commerce Department announced Friday morning that it will ban U.S. business transactions with Chinese-owned social apps WeChat and TikTok on Sunday.

The announcement comes as the Trump administration continues to look at a deal in which Oracle would take a minority stake in TikTok and become a “trusted technology partner” for the company in the U.S.

When asked about the TikTok deal during a press conference Friday afternoon, President Donald Trump said it could happen “quickly,” and pointed to the U.S. companies involved, like Oracle. He also brought up Microsoft as a bidder, even though Microsoft said it backed out of the deal last Sunday after its bid was rejected.

The Commerce Department’s announcement leaves room for a deal to go through before the Sunday deadline, and it could be an aggressive move from the Trump administration to push for its original intention to force TikTok to become fully owned by a U.S. company.

“At the President’s direction, we have taken significant action to combat China’s malicious collection of American citizens’ personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations.” Commerce Secretary Wilbur Ross said in the announcement.

Also from the US Department of Commerce press release:

In response to President Trump’s Executive Orders signed August 6, 2020, the Department of Commerce (Commerce) today announced prohibitions on transactions relating to mobile applications (apps) WeChat and TikTok to safeguard the national security of the United States. The Chinese Communist Party (CCP) has demonstrated the means and motives to use these apps to threaten the national security, foreign policy, and the economy of the U.S. Today’s announced prohibitions, when combined, protect users in the U.S. by eliminating access to these applications and significantly reducing their functionality.

“Today’s actions prove once again that President Trump will do everything in his power to guarantee our national security and protect Americans from the threats of the Chinese Communist Party,” said U.S. Department of Commerce Secretary Wilbur Ross. “At the President’s direction, we have taken significant action to combat China’s malicious collection of American citizens’ personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations.”

While the threats posed by WeChat and TikTok are not identical, they are similar. Each collects vast swaths of data from users, including network activity, location data, and browsing and search histories. Each is an active participant in China’s civil-military fusion and is subject to mandatory cooperation with the intelligence services of the CCP. This combination results in the use of WeChat and TikTok creating unacceptable risks to our national security.

As of September 20, 2020, the following transactions are prohibited:

  1. Any provision of service to distribute or maintain the WeChat or TikTok mobile applications, constituent code, or application updates through an online mobile application store in the U.S.;
  2. Any provision of services through the WeChat mobile application for the purpose of transferring funds or processing payments within the U.S.

As of September 20, 2020, for WeChat and as of November 12, 2020, for TikTok, the following transactions are prohibited:

  1. Any provision of internet hosting services enabling the functioning or optimization of the mobile application in the U.S.;
  2. Any provision of content delivery network services enabling the functioning or optimization of the mobile application in the U.S.;
  3. Any provision directly contracted or arranged internet transit or peering services enabling the function or optimization of the mobile application within the U.S.;
  4. Any utilization of the mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the U.S.

This suggests that, by November 12, ISPs would no longer be allowed to permit access to WeChat or TikTok. No US service will be permitted to permit access to those same platforms. No app offered in the US will be permitted to offer access to the platforms as well.

Many critics point out that the order is blatantly unconstitutional. What’s more is that this order could actually revitalize the TikTok employee lawsuit against the Trump administration. In court filings in response to the employee lawsuit, the Trump administration asked the judge to dismiss the lawsuit on the grounds that the order would not prohibit employees from working at TikTok. The problem is that if you can’t access TikTok, how can you be reasonably expected to work on the platform. An example would be if your job is content moderation. Can’t moderate content if you can’t access the site.

Then there is the obvious point that the Trump administration can’t reasonably fully ban the platforms in the first place. There are, no doubt, plenty of VPN’s willing to offer access in other countries. After all, so many VPN’s sell their services to skirt censorship. This would be an incredibly big example of those services allowing users to circumvent this censorship.

If anything, this story is going to continue in the courts. What is likely is that there will be requests before courts to temporarily nullify the censorship until the legal challenges are settled.

Still, we struggle to think of a case where the US has outright banned an entire platform like this. Sure, smaller operations have been blocked by US ISPs in the past, but we can’t think of when a censorship order has hit a site so big under such legally dubious reasons before. If you are a free speech advocate, this is a terrible day. If you are a lawyer, this is a spectacular day.

Drew Wilson on Twitter: @icecube85 and Facebook.



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