By Katy Stech Ferek and John D. McKinnon
The Trump administration will begin banning downloads and use of
popular Chinese-owned apps TikTok and WeChat late Sunday, in a move
U.S. officials said was driven by national security concerns but
which drew objections for impinging on free-speech rights.
The Commerce Department issued regulations Friday to bar U.S.
companies from providing downloads or updates for the TikTok and
WeChat apps after 11:59 p.m. Sunday. Companies will also be banned
from providing data hosting services for WeChat at that time.
"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 Chinese Communist Party.
The regulations implement executive orders signed by President
Trump last month to ban the apps, with two key concessions.
Commerce said it would allow U.S. companies to continue
providing web-hosting services for TikTok through Nov. 12, amid
talks with its Chinese owner ByteDance Ltd. and Oracle Corp. to
create a new U.S.-based owner of the video-sharing app that has
become a fixture on millions of American teenagers' smart
Commerce will also allow U.S. companies to continue using WeChat
outside the U.S. -- including in China, where the multipurpose app
owned by Tencent Holdings Ltd. is used for mobile payments,
messaging, marketing and business communications.
U.S. companies doing business in China said a ban on their use
of WeChat in China would put them at a severe competitive
Some free-speech advocates and scholars, however, sounded alarms
over the constitutionality of the administration's orders.
"I think these actions violate the First Amendment," said Erwin
Chemerinsky, dean of the UC Berkeley law school. "This is about
cutting off a medium of speech. That is unprecedented, even in the
context of trade restrictions, and unconstitutional."
On Friday, a federal judge in California declined to grant a
request from a WeChat users group for a preliminary injunction
blocking implementation of the executive order.
In a separate lawsuit that TikTok filed last month against
Commerce to stop the implementation of the orders, the app's
lawyers also raised First Amendment grounds and suggested that the
order unfairly punishes TikTok for providing political content.
"The order specifically justifies targeting TikTok based in part
on the content of the videos hosted on TikTok, citing concerns
about videos on 'politically sensitive' topics and videos about the
'origins of the 2019 Novel Coronavirus,'" TikTok lawyers said in
Federal government lawyers have defended their actions, saying
in court filings in the WeChat suit that the executive ban "does
not target protected expression," and that there are numerous
alternative platforms available.
A person with knowledge of the Chinese government's thinking
said the situation could have been worse, noting that U.S.
companies can continue using WeChat in China, and TikTok has been
given time to resolve the ban through a U.S. sale or
More broadly, this person said, the U.S. appears to be moving
toward requiring Chinese firms doing business in the U.S. to store
their data here -- something China has required of U.S. companies,
over American objections. "Washington basically is doing something
it has long criticized Beijing for," the person said.
Nicol Turner Lee, director of the Center for Technology
Innovation at the Brookings Institution, a centrist Washington
think tank, said the Trump administration's actions were leading to
a decoupling of the U.S. and China, but one "without substantive
data or policy that would allow us to have reasonable alternatives
in the U.S. marketplace or strategy for ensuring U.S. companies do
not get closed out of emerging markets."
"The impulsiveness of this administration to restrict our
dealings with Chinese companies also doesn't factor in the economic
consequences," she said.
Commerce Secretary Wilbur Ross said that he made the decision on
the rules after Mr. Trump ordered his department to review the apps
for national-security concerns last month.
"China has been taking all kinds of data," Mr. Ross said on the
Fox Business Network. "That's what we're trying to squelch."
In a statement, Tencent said that it has "always incorporated
the highest standards of user privacy and data security" and had
submitted a comprehensive proposal to address U.S. security
A TikTok spokesman said the company has "already committed to
unprecedented levels of additional transparency and accountability
well beyond what other apps are willing to do, including
third-party audits, verification of code security, and U.S.
government oversight of U.S. data security."
In its order announced Friday, Commerce said it would 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 for
In a call with reporters on Friday, a senior Commerce official
declined to explain how the new rules would be enforced or whether
it would impose monetary penalties for violations.
Commerce officials conceded that WeChat and TikTok users could
probably find workarounds to evade the ban. But they said the
effect of the rules will be to seriously degrade the functionality
of the apps for U.S. consumers.
Users will experience slow speeds to the point of timing out, so
while the service might still be technically usable, it won't be
very functional after Sunday night, officials said.
While U.S. companies would be allowed to continue using WeChat
outside of the country, the Commerce announcement indicated that
the agency could prohibit overseas use of WeChat by Americans in
the future. It also could move against other online services
offered by Tencent such as its gaming platforms, according to the
Commerce officials delayed prohibition of transactions that
would greatly impair TikTok's user experience until Nov. 12,
matching the 90-day deadline that Mr. Trump set for the divestiture
of TikTok's U.S. operations. In that order, the president said that
ByteDance, "might take action that threatens to impair the national
security of the United States."
Mr. Trump seemed to express optimism on Friday that a deal to
put TikTok under the control of U.S. investors and companies can be
reached. "We have some great options, and maybe we can keep a lot
of people happy but have the security we need," he told reporters
at the White House.
Asked whether he expects a deal before the election, the
president said he hoped to reach an agreement quickly. "We're not
going to do anything to jeopardize security. At the same time, it's
an amazing company and very, very popular."
TikTok officials said the app surpassed two billion global
downloads last month and has roughly 50 million daily active users
in the U.S. The Trump administration contends that the data TikTok
collects from U.S. consumers could be shared with the Chinese
government. TikTok has said it would never hand over such data.
In response to a question, a Commerce official rejected the idea
that, in light of TikTok's popularity, politics played a role in
postponing the full ban until after the Nov. 3 election.
Beijing-based ByteDance has been locked in negotiations over how
to address the U.S. government's security concerns, and this week
seemed to be gaining momentum toward an agreement that Mr. Trump
could sign. A consortium of U.S. companies, led by Oracle, are
discussing a plan to take a majority stake in a new company that
would oversee TikTok's operations and ensure its data security.
People involved with the negotiation talks have said multiple
times throughout the week that an agreement appeared imminent, even
while key issues were still being ironed out. But the announcement
on Friday indicates there may be further distance between the two
sides than previously understood.
A senior Commerce official said Friday that as the TikTok deal
moves forward, Mr. Ross is prepared to "change or even potentially
remove the restrictions [on TikTok] if the president agrees to a
WeChat and its Chinese 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."
After Mr. Trump's August executive orders, Tencent hired Edward
Royce, former chairman of the House Foreign Affairs Committee, and
four other lobbyists from Brownstein Hyatt Farber Schreck LLP,
according to a disclosure filing.
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
Jing Yang, Georgia Wells and Lingling Wei contributed to this
Write to Katy Stech Ferek at firstname.lastname@example.org and John D.
McKinnon at email@example.com
(END) Dow Jones Newswires
September 18, 2020 16:23 ET (20:23 GMT)
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