Short-form video app TikTok and the Trump administration remained at odds over the sale of the company’s US operations late Friday as a deadline loomed, according to a source familiar with the matter.
The Committee on Foreign Investment had given TikTok parent ByteDance, based in China, until midnight to come up with an acceptable deal to put TikTok’s American assets into US hands.
Talks between TikTok and government negotiators will continue even after the deadline passes, and people in the US will still be able to use the popular smartphone app for sharing video snippets, the source said.
The US had already backed off enforcing a ban on TikTok, in compliance with a court order in favor of the Chinese-owned social media sensation.
The White House claims TikTok is a national security risk because of potential links to the Chinese government through its parent firm ByteDance.
TikTok has repeatedly defended itself against allegations of data transfers to the Chinese government.
It says its servers where user information is stored are located in the United States and Singapore.
– Ban stalled –
A US federal judge in late October issued an injunction temporarily blocking an executive order by Trump aimed at banning TikTok, throwing up a legal roadblock.
The judge’s ruling hit the brakes on a Trump threat to knock TikTok offline by cutting it off from US businesses providing website hosting, data storage and other fundamentals needed to operate.
But TikTok influencers suing the president over the ban convinced US District Court Wendy Beetlestone to issue the injunction against it.
It was the second restraint issued in favor of TikTok by US judges against a set of executive orders issued by Trump which sought to ban new downloads of the app beginning in September, and ban it outright by mid-November.
A temporary injunction issued in September in a separate suit filed by TikTok itself prevented the government from removing it from mobile application download platforms.
Judges in both cases said in rulings that the chances of proving in court that Trump overstepped his authority were good.
They also equated TikTok to films, photographs, and news wires with legal protections.
– Washington vs Beijing –
The Friday deadline was for ByteDance to come up with a deal to sell TikTok operations in the US.
“The committee is engaging with ByteDance to complete the divestment and other steps necessary to resolve the national security risks arising from the transaction, consistent with the president’s August 14 order,” said a spokesperson for the Treasury, which oversees the committee.
TikTok declined to comment.
A tentative deal has been unveiled that would make Silicon Valley giant Oracle the technology partner for TikTok and a stakeholder in a new entity to be known as TikTok Global.
Oracle would manage data security through its cloud servers, while TikTok would retain control of its algorithms and technology, according to details of the proposed deal shared earlier this year.
However, Trump has said he would not approve a deal with any Chinese ownership or control.
China, meanwhile, has tightened control of technology exports in a move that promised to complicate any deal for TikTok to sell US assets.