The US Department of Commerce ordered the removal of TikTok last Sunday. But he extended the deadline after President Donald Trump gave preliminary approval to a deal involving ByteDance, the app’s Chinese owner, giving minority stake to Oracle and Walmart.
ByteDance was forced to come up with a proposal after the United States expressed concern that Chinese ownership of TikTok could make it easier for China to spy on US citizens by forcing the company to transmit data to its users.
ByteDance and U.S. businesses have until Nov. 12 to finalize a deal under an executive order Mr. Trump issued in August.
In a rare Sunday hearing, attorneys for TikTok argued the app ban was now nonsense as companies remained in negotiations with the US government to address its security concerns. national.
“How does it make sense to impose this app store ban tonight when there are ongoing negotiations that could make it unnecessary,” said John Hall, a Covington and Burling attorney representing TikTok.
“It’s just a straightforward way of hitting the business now without doing anything to achieve the stated goal of the goal.”
The administration responded that TikTok posed an “immediate threat to national security” that needed to be addressed, even as ByteDance continued negotiations.
“It is a risk today and deserves to be addressed today even as other things play out,” Daniel Schwei of the US Department of Justice told Judge Carl Nichols at a court hearing district in Washington DC.
The battle is just the latest salute in a growing technological war that Washington has launched with China. Last week, the Commerce Department targeted the Semiconductor Manufacturing International Corporation, warning companies that export to China’s largest chipmaker of an unacceptable risk of the technology being diverted to “military end use.”
In August, Mr. Trump threatened to ban TikTok, fearing it could potentially give the Chinese government access to the private data of millions of Americans. But then he changed tack, saying he would allow the app to work in America as long as ByteDance sold it to an American company.
Although the president gave his blessing last week, he also voiced concerns about the structure of the deal. Under the proposal, Oracle and Walmart would take a 20% stake in a new US-based company that would operate TikTok across the globe and at some point be listed on one of the US stock exchanges.
Business has also caused confusion. Oracle said ByteDance would have “no ownership” in TikTok Global, but the Chinese company said it would have an 80% stake.
The Committee on Foreign Investments in the United States – an interagency group that can block deals for security reasons – is evaluating the proposal. But the deal is also coming under scrutiny in China due to a new export control law introduced by Beijing.
ByteDance earlier this week applied to the Chinese government for a license to export the technology that powers TikTok, including the critical algorithm that determines which videos appear when someone uses the app. The new law gives China the power to block technology transfers that could also end up jeopardizing the deal.
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