Donald Trump delayed the latest US TikTok ban this weekend, reportedly after a White House facilitated deal to sell the short form video app’s US operations stalled in the wake of the President’s big tariffs party.
Any deal to shift ownership of TikTok US from China-based Bytedance to a US-controlled entity - a shift required to avoid the TikTok ban put in place by US Congress last year - needs the approval of the Chinese government.
But Beijing wasn’t in approval-granting mood as the deadline for agreeing that deal arrived this weekend as a result of Trump last week announcing that he was boosting the tariff charged by the US on Chinese imports from 20% to 54%.
However, for those creators and artists who rely on TikTok as a key fan engagement tool, the official line from Team Trump is that a deal will still be done and that the platform will continue to operate in the US in the long term. The President himself stated on social media that “we look forward to working with TikTok and China to close the deal”.
That said, just to complicate things even further, there’s a new lawsuit to contend with filed by a group of investors who bid to buy TikTok US when Trump tried to ban it back in 2020, and who now want a judge to force ByteDance to sell it the US business as part of the latest round of deal making.
Though the same lawsuit, filed by a consortium led by Brad Greenspan, founder of the company that set up MySpace back in the day, also wants $58 billion in compensatory damages, so the whole thing feels rather outlandish.
Congress originally gave ByteDance until 19 Jan to sell TikTok to avoid being banned in the country, part of a law designed to deal with concerns that the Chinese government has access to US TikTok user-data via its China-based owner. ByteDance failed to get the demands of Congress blocked in the courts on constitutional grounds and actually went offline in the US for a short time as that deadline arrived.
However, Trump - despite trying to ban TikTok himself during his first presidency - vowed to save the app by facilitating a deal that satisfies Congress, ByteDance and the Chinese. To that end, on his first day in office, he postponed the ban for 75 days and tasked Vice-President JD Vance with overseeing the deal.
There has been no shortage of American bidders interested in having a stake in TikTok US and - while the chances of having an acquisition fully completed by Trump’s 5 Apr deadline always seemed ambitious - there was speculation that a basic deal could be in place by that date.
Then the President could provide another 120 days for the transaction to complete. Certainly Vance's people were bullish that the basic deal could be completed by 5 Apr.
Whether that was ever achievable we’ll never know, but once Trump had kickstarted a full-on global trade war, with China a top target, getting Chinese government approval by this weekend seemed unlikely. In his post to Truth Social on Friday, Trump wrote, “my administration has been working very hard on a deal to SAVE TIKTOK and we have made tremendous progress”.
But the deal “requires more work” he added, “which is why I am signing an executive order to keep TikTok up and running for an additional 75 days”. He acknowledged that China “are not very happy” about his tariffs, though, he was quick to add, they are “necessary for fair and balanced trade between China and the USA”. But, when it comes to TikTok, “we hope to continue working in good faith with China”.
Reports suggest that the deal being overseen by Vance will see a number of American investors have a stake in a new TikTok US company, with ByteDance retaining an interest, but below 20%. Reuters sources say that ByteDance and its current investors, and the US government, have all approved that deal, but then the Chinese government declined to provide its approval.
For its part, ByteDance said in a statement, “We are still in talks with the US government, but no agreement has been reached and the two sides still have differences on many key issues”. It also reminded everyone that “in accordance with Chinese law, any agreement is subject to the relevant review procedures”.
As all this was happening in Washington and Beijing, a lawsuit was filed in Florida by an entity known as TikTok Global, which was set up by Brad Greenspan in 2020 when Trump was busy issuing executive orders that were trying to ban TikTok, rather than halting Congress’s ban.
That lawsuit reminds us that, in 2020, Trump tried to ban TikTok because of the same national security concerns over the Chinese government having access to US user-data.
He issued executive orders that exercised powers granted by Congress to the President and the US Committee On Foreign Investment In The United States, or CFIUS. As with the law passed by Congress last year, the aim of the executive orders was to force a sale of the TikTok US operation to an entity controlled by a US company.
TikTok Global was set up to make a bid for those US operations in a way that fully complied with procedures that had been put in place by CFIUS.
The lawsuit claims that it first formally complied with those procedures and then made an offer to ByteDance to buy TikTok US. However, it says, instead of entering into negotiations with TikTok Global, ByteDance began negotiating an alliance with the US-based Oracle that would result in a compromise that would satisfy Team Trump but which would not, it claims, comply with the CFIUS procedures.
In the end, ByteDance successfully stalled Trump’s executive orders in the US courts and then Joe Biden cancelled them the following year. However, Oracle has remained very much involved in all the subsequent talks regarding TikTok’s US operations, including in the context of the Vance facilitated deal.
“ByteDance and Oracle engaged in an unlawful conspiracy in violation of the Sherman Act”, the TikTok Global lawsuit dramatically declares. "The victim of this grand scheme was the plaintiff, whose aspirations to acquire TikTok’s US operations were dashed”.
Now seems like a good time for the courts to act over this alleged bad conduct on ByteDance’s part, the lawsuit adds, before asking the judge to “award compensatory damages of not less than $58 billion” and “grant preliminary and permanent injunctive relief requiring ByteDance to divest TikTok's US operations to plaintiff”.
All of which seems very ambitious, but it’s nevertheless an interestingly timed bit of litigation.