It seems like Huawei isn't the only Chinese tech company the Trump administration is targeting anymore. Earlier today, the White House announced that it would be banning Chinese apps TikTok and WeChat from US app stores starting this Sunday. That means you won't be able to download the apps or any new updates, but if you still have them on your phone, you can continue to use TikTok, at least.
WeChat, unfortunately, won't have the same leniency- you'll be banned from transferring funds or processing payments through the app, and it will be illegal for ISPs to host traffic associated with it. The same restrictions are set to apply to TikTok starting on November 12th, to give the company time to work out a potential sale to Oracle.
These bans follow an August 6th executive order from the Trump administration, where he argued that TikTok and WeChat collect data from American users that could be accessed by the Chinese government. The order warned that the apps would be banned on September 20th if their owners had not sold them to an American company by that time. An American bidding war quickly erupted over TikTok, with companies like Microsoft and Walmart vying for control over the viral short-form video app. Oracle seems like the current front-runner (with Walmart potentially set to hold a partial stake), but the ban will remain in effect until Trump approves the purchase.
Aside from phone users, the bans could have a significant impact on gamers, especially the harsher WeChat ban. While TikTok is currently owned by ByteDance, which largely focuses on Chinese-specific social media platforms, WeChat is owned by Tencent, the parent company of major American video game developers like League of Legends developer Riot Games. It's also a large contributor to other studios like Fortnite developer Epic Games.
Bloomberg reported yesterday that both Epic and Riot had received letters from the US Committee on Foreign Investment (or CFIUS) asking the companies about their security protocols in handling Americans' personal data. We don't know many specifics yet, but former deputy assistant secretary for investment security Aimen Mir told Bloomberg that while CFIUS has traditionally been interested in protecting data surrounding health, financial, and government employee information sectors, it's now broadening the type of data it's focused on.
"When you're talking about massive amounts of data, there's probably something for the committee to look at," said Mir. "The question then becomes: is the risk high enough that it actually warrants forcing deals apart?" Besides losing profits, Mir also warned that a potential risk here is Chinese retaliation against American companies doing business in China.
CFIUS can take this risk in part because of a 2018 Congressional decision that gave it increased jurisdiction to review transactions, even retroactively, from foreign companies for non-controlling investments if those companies collect sensitive personal data of US citizens. This, in turn, means that the current crackdown might have been in the works for a while.
Tencent responded to the WeChat crackdown and potential gaming investigations in a statement sent to publications like The New York Times and CNBC. The statement called the restrictions "unfortunate" and promised that the company would do everything it can to continue to serve customers. "Given our desire to provide ongoing services to our users in the US - for whom WeChat is an important communication tool - we will continue to discuss with the government and other stakeholders in the US ways to achieve a long-term solution."
TikTok spokesman Josh Gartner also replied to the ban by saying, "We will continue to challenge the unjust executive order, which was enacted without due process and threatens to deprive the American people and small businesses across the US of a significant platform for both a voice and livelihoods."
Bloomberg analysts Vey-Sern Ling and Tiffany Tam aren't positive that this resistance will lead to much, however, speculating that Tencent's US gaming investments, like Epic, Riot, and Activision Blizzard, are at the same risk of forced divestment as TikTok. This might point to a larger trend in the future regarding how the US deals with Chinese investment in its companies.
For instance, Commerce Secretary Wilbur Ross said in his own statement today that "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."
On a more personal level, Twitter users have started joking about selling their iPhones with TikTok installed on them at a heavy mark-up, reviving the #FlappyBird trend to discuss the similar phenomenon that took place when that game's developer pulled it from the App Store (for more personal reasons than what's happening here).
I, for one, am installing TikTok while I still can. Chinese readers, it might also be worth it to install the similarly data-hungry Facebook before the Chinese government retaliates.
