TCEHY Tencent Holdings Ltd (PK)

By Andrew Restuccia and Siobhan Hughes 

WASHINGTON--President Trump signed an executive order on Thursday that effectively sets a 45-day deadline for an American company to purchase the U.S. operations of TikTok, calling the popular Chinese-owned video-sharing app a national and economic security threat.

Once that period is up, the order bars people in the U.S. or people subject to U.S. jurisdiction from making any transaction with Beijing-based ByteDance Ltd., TikTok's parent. The order formalizes Mr. Trump's earlier calls for shutting down TikTok should Microsoft Corp. fail to complete a deal within 45 days.

Microsoft has said it hopes to acquire TikTok's business in the U.S. and three other countries. The company, which said Sunday it aimed to complete the takeover discussions no later than Sept. 15, declined to comment on the order and TikTok did not immediately respond to a request for comment.

U.S. officials have expressed concern that TikTok would let China's authoritarian government have access to the data TikTok collects from Americans and other users. TikTok has said it would never hand over such data.

"TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories," the executive order says. "This data collection threatens to 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."

Mr. Trump said earlier this week he was prepared to approve a purchase of TikTok's U.S. operations, but he said a "very substantial portion" of the sale price should go to the U.S. government.

The president signed a similar executive order imposing restrictions on transactions between individuals in the U.S. and Tencent Holdings Ltd., which operates the Chinese social media app WeChat.

Though lower-profile in the U.S., WeChat is a do-everything app that is deeply integrated into the lives of more than one billion people in China, as well as in the Chinese diaspora. In addition to messaging, it also processes transactions and other functions. WeChat has 19 million daily active users in the U.S., according to app data tracker Apptopia, compared with the 100 million users that TikTok says it has in the country. A Tencent spokesman declined to comment.

The executive order comes hours after the Senate unanimously passed a bill prohibiting federal employees from using TikTok on government-issued devices as U.S. national-security concerns mount.

The measure passed through an expedited procedure that avoided a roll-call vote. The White House has been pushing for a sale of TikTok to U.S. owners, citing national-security risks amid fears that the Chinese government could exploit the personal data of users.

"In light of all we know, it is unthinkable to me that we should continue to permit federal employees, those workers entrusted with sensitive government data, to access this app on their work phones and computers," Sen. Josh Hawley (R., Mo.), the sponsor of the measure, said in a statement. "If I have anything to say about it, we won't be stopping here."

The House has already approved a similar measure as part of a wide-ranging, must-pass measure to authorize military spending. President Trump has threatened to veto that broader legislation over his opposition to provisions renaming military bases that honor the Confederacy.

To become law, both chambers would have to enact the TikTok legislation in the same format.

Microsoft has said that it plans to move quickly to pursue discussions with ByteDance.

The Senate bill also bans on government-issued devices any successor application developed by ByteDance or any entity it owns.

Jing Yang in Hong Kong contributed to this article.

Write to Andrew Restuccia at Andrew.Restuccia@wsj.com and Siobhan Hughes at siobhan.hughes@wsj.com

(END) Dow Jones Newswires

August 06, 2020 23:08 ET (03:08 GMT)

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