TikTok faces sale or ban deadline; Trump optimistic for a deal
April 4 (UPI) -- The deadline for TikTok to be sold or banned in the United States is set for Saturday as President Donald Trump has voiced his support for keeping the app active.
The president's 75-day pause on enforcing Congress' law banning TikTok will expire on Saturday unless its Chinese parent company ByteDance divests to U.S. investors or Trump extends the deadline.
Trump told reporters Sunday that there are multiple potential buyers interested in TikTok and he hopes to "see TikTok remain alive."
"There's tremendous interest in TikTok," Trump said.
Trump's first extension to TikTok came by way of executive order, granting the company and his administration more time to consider a resolution. The law passed by Congress allows for a 90-day delay in enforcement.
Norman Bishara, professor of business law and ethics in the Stephen M. Ross School of Business at Michigan, told UPI that, as the law is written, Trump could extend the delay in enforcement another 15 days. However, he cautioned that there is a lack of clarity around the limits of Trump's authority in this instance.
"The president was authorized in this bipartisan piece of congressional legislation to do a 90-day extension," Bishara said. "Trump chose to do an executive order. Functionally what that has done is directed the Department of Justice not to enforce the ban."
Congress has yet to push back on Trump's executive orders that override its actions. Unlike other executive orders the president has issued in his current term, the one delaying enforcement against TikTok has not been met with any legal challenges.
There are three outcomes that are in play, according to Bishara. First, Trump can issue another extension, delaying enforcement and keeping TikTok active while continuing to explore a sale. This would effectively not change anything for U.S. users for the time being.
An extension would need to come with the same assurances that the administration made when it first gave TikTok a reprieve, including a guarantee that the attorney general will not take enforcement actions against service providers for supporting the app.
The second option is for ByteDance to divest from TikTok, selling control of the app to U.S. investors. According to Bishara, a deadline extension is likely still necessary with the deadline drawing near.
In order for a deal to purchase TikTok to be approved, the Federal Trade Commission and the Antitrust Division of the Department of Justice need to review and sign off on the deal. According to the FTC, the buyers and sellers of a company must provide information about their businesses and their industries, then wait up to 30 days to complete a merger.
The review process includes sharing of non-public information to the agencies. The agencies may also make a second request for more information, granting them additional time to review the deal.
A deal becomes more complicated if the purchasing entity is involved in the same industry as the seller. For instance, a tech or social media company purchasing TikTok will raise more scrutiny over the potential for monopolization or anticompetitive practices.
"There's multiple parties you usually don't have involved like the U.S. government and the Chinese government," he said. "From the Chinese government, that's the real missing part. There is not any assurance the Chinese government is going to let ByteDance go through with this deal and turn over the keys to this much discussed and all-important TikTok algorithm. It's going to take time."
The third option is the ban takes effect, causing TikTok to go dark like it did briefly in January, blocking content in the United States.
Servicers like Apple and Google will no longer push through updates to the app and it will not appear in app stores. Without support, the app will not receive security and performance updates for U.S. users.
TikTok has an estimated 170 million monthly users in the United States.
"It's not really to anyone's business advantage," Bishara said. "If the ban comes back into effect, the user base is feeling like it can't trust the reliability of the app and policymakers trying to shut it down. You'll see, really, the value go down."
Trump, during his first term, and Congress have cited TikTok as a potential national security issue. Lawmakers and national security expressed in committee hearings concerns with how U.S. user data is used and the potential that U.S. users could be influenced by the Chinese Communist Party or other foreign actors.
Bishara observed that the national security concerns that were prevalent since Trump targeted banning TikTok in 2020 have fallen to the background in the larger discussion around the platform.
"It seems like there's more comfort with TikTok in some circles. Certainly Republicans who are in power now," he said. "We have Trump saying he has admiration for the platform and its user base. I don't think [national security concern] has been removed but there seems to be this period of almost hopefulness that things can fall into place and you'll be able to get all those wins on the business side and the user side."
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