By Katy Stech Ferek 

The Trump administration said Friday that it will ban downloads of the Chinese-owned video-sharing app TikTok and the U.S. use of China's popular messaging and electronic payment app WeChat after Sunday night over national security and data privacy concerns.

Commerce Secretary Wilbur Ross said on Fox Business Network that his office will order a full ban for TikTok by Nov. 12 but noted that discussions for a deal that would incorporate data safeguards could enable U.S. users continued access of TikTok.

As of Sunday, TikTok users in the U.S. will be blocked from maintenance and upgrades, according to a Commerce Department release.

A TikTok spokeswoman and WeChat owner Tencent Holdings Ltd. didn't immediately respond to requests for comment on the new rules.

Commerce officials said the Chinese-owned apps pose similar threats to Americans.

"Each collects vast swaths of data from users, including network activity, location data, and browsing and search histories," the Commerce Department said. "Each is an active participant in China's civil-military fusion and is subject to mandatory cooperation with the intelligence services of the CCP."

Mr. Ross said he made the decision after President Trump ordered his department to review WeChat for national security concerns last month.

"China has been taking all kinds of data...that's what we're trying to squelch," he said.

As of Sunday, Commerce said it will block "any provision of service to distribute or maintain the WeChat or TikTok mobile applications, constituent code, or application updates through an online mobile application store in the U.S." It will also block any money transfers through the WeChat app.

On Thursday, a federal judge heard arguments from WeChat users who sued to block the ban but didn't immediately issue a ruling.

In a filing on that case Wednesday, Justice Department lawyers said the government wouldn't pursue legal action against individuals who use WeChat "to convey personal or business information between users," a clarification plaintiffs said still didn't make clear which specific activities would be barred.

WeChat bundles social media, text messages, mobile payments, corporate marketing and other functions into one app. While WeChat's users are primarily in China, the app is important among the Chinese diaspora in the U.S. and is widely used by foreigners with professional or personal ties in China.

WeChat and its domestic sister app Weixin have about 1.21 billion monthly active users combined. On an earnings call in August, Tencent executives sought to distinguish the two apps and allay investors' fears. The company generates less than 2% of revenue from the U.S., a Tencent executive said at the time.

American brands from Walt Disney Co. to Walmart Inc. rely on WeChat to reach and collect payments from customers in China. Nine out of 10 companies surveyed by the American Chamber of Commerce in Shanghai said the ban would hurt their Chinese operations, should the ban extend to China.

Launched by Tencent in 2011, WeChat has become the go-to example of China's capacity to innovate. In addition to running the world's most-used social media app, Tencent is the world's biggest videogame company by revenue. In the U.S., Tencent owns Riot Games Inc., creator of the popular videogame "League of Legends," and has stakes in "World of Warcraft" maker Activision Blizzard Inc. and Epic Games Inc., developer of the popular game "Fortnite."

With a market value of more than $645 billion, Hong Kong-listed Tencent is one of the biggest companies in China and works closely with the government. Chairman and Chief Executive Pony Ma has been a member of the rubber-stamp National People's Congress since 2013.

Jing Yang contributed to this article.

Write to Katy Stech Ferek at katherine.stech@wsj.com

 

(END) Dow Jones Newswires

September 18, 2020 09:19 ET (13:19 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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