Late Thursday evening, President Donald Trump issued two executive orders banning social media apps TikTok and WeChat from operating in the United States in 45 days.
Under the ban, transactions between American companies and citizens and the Chinese tech giant Tencent would be prohibited if they are not sold to American companies under the allotted time.
The executive orders do not state what ownership percentage or global markets would have to be given to American companies to pause the ban. The Trump administration has also stated that any deal would have to include a “substantial amount of money” coming to the U.S. Treasury.
The Trump administration had been critical of the apps, stating that their data collection process could put Americans at risk despite numerous experts citing their data collection practices were on par with the industry standard.
Nonetheless, in his executive orders, President Trump stated that the apps could “allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.”
President Trump had initially set a deadline of Sept. 15 for when ByteDance, owner of TikTok, would need to sell the social media app to an American-owned company. Microsoft has been in talks of acquiring TikTok’s business in certain markets, specifically the U.S., Canada, Australia, and New Zealand, but has shown little interest in their other markets.
The move leaves a lot in the air as Tencent is also the owner of some of the largest U.S.-based game developers in the world. The company retains full ownership of Riot Games, developers of popular games League of Legends, Legends of Runeterra, and Valorant; 40 percent ownership of Epic Games, developers of the popular shooter Fortnite; and 5 percent ownership of Activision Blizzard, the parent company of the developers of Call of Duty, World of Warcraft, and Destiny 2.
Though White House officials confirmed that the initial wave of bans will not affect video game companies owned by Tencent, potential Chinese retaliation and subsequent executive orders could put them at risk.
Video game companies owned by Tencent will NOT be affected by this executive order!— Sam Dean 🦅 (@SamAugustDean) August 7, 2020
White House official confirmed to the LA Times that the EO only blocks transactions related to WeChat
So Riot Games (League of Legends), Epic Games (Fortnite), et al are safe
TikTok released a statement following the announcement where it expressed confusion and shock at the decision.
“For nearly a year, we have sought to engage with the US government in good faith to provide a constructive solution to the concerns that have been expressed. What we encountered instead was that the Administration paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses."