Re:Trump gives nod to Oracle buyout of TikTok in US
by StavrosK on Wednesday August 19, 2020 @07:00AM
(#24209071)
Looks like both Bytedance and Musical.ly are Cayman islands, so I'm not sure how the US has any say in what they do, though I understand the spirit is "do what we want or lose the US (and possibly the world) market".
I don't know how anything the US does can affect what two companies in a different country decide to do between them, legally speaking. The executive order sounds weird to me.
Also, I don't understand how they can block a sale three years later. What's the time frame on that? Why not ten years later? A hundred?
Re:Trump gives nod to Oracle buyout of TikTok in US
by Macha on Wednesday August 19, 2020 @10:51AM
(#24210954)
The US can embargo the product and prevent its use in the US. This is a significant enough market to the company that they'd rather have whatever the discounted sale price of a forced sale than what they think the future value of (Tiktok - USA - India - other US Allies that get encouraged to do the same) is.
Re:Trump gives nod to Oracle buyout of TikTok in US
by em500 on Wednesday August 19, 2020 @06:12AM
(#24208846)
> "... and that may threaten to impair national security."
Is there any framework for independent review whether something is a genuine threat?
Re:Trump gives nod to Oracle buyout of TikTok in US
by cm2187 on Wednesday August 19, 2020 @06:39AM
(#24208964)
I don’t know, but lots of people seem to think that social networks can be used to manipulate elections.
Re:Trump gives nod to Oracle buyout of TikTok in US
by gruez on Wednesday August 19, 2020 @10:22AM
(#24210647)
>Is there any framework for independent review whether something is a genuine threat?
I'm not sure whether that would help. Both sides are pretty anti-china atm.
Re:Trump gives nod to Oracle buyout of TikTok in US
by phantomathkg on Wednesday August 19, 2020 @06:56AM
(#24209050)
When a country say another country/company is a threat. Does it need a framework? It is all politics.
Re:Trump gives nod to Oracle buyout of TikTok in US
by helsinkiandrew on Wednesday August 19, 2020 @06:31AM
(#24208922)
Many believe that this is the mechanism by which the Trump administration is using to remove Chinese influence from TikTok rather than the cause.
It’s easier to legally justify than proving the ‘security threat’ of TikTok giving the Chinese government users data.
https://www.whitehouse.gov/presidential-actions/order-regard...
Bytedance acquired Musical.ly in 2017, and merged it into TikTok the next year. The administration is now blocking the sale of Musical.ly under Section 721 of the Defense Production Act. Section 721 "authorizes the President to suspend or prohibit a transaction, by or with any foreign person, that may result in control of a U.S. business by a foreign person and that may threaten to impair national security." [1] The president used this power to block the sale of Musical.ly on national security grounds.
Congressional approval is not needed for this action. The legal framework was approved by Congress with the Foreign Investment and National Security Act of 2007. The president has the legal authority to issue such national security orders. However, typically the president delegates the national security review to CFIUS, a government agency.
TikTok never received clearance from CFIUS when it acquired Musical.ly in 2017 [3]. This allows the US to preform a national security review now, three years later.
To answer your question, Bytedance is not legally 'forced' to divest their US operations. They are proceeding with the sale because the alternative is a death blow to their US operations.
[1] https://www.gibsondunn.com/cfius-guidance-alert/
[2] https://en.wikipedia.org/wiki/Foreign_Investment_and_Nationa...
[3] https://www.reuters.com/article/us-tiktok-cfius-exclusive/ex...