How the Trump ban on TikTok will work

There’s a 45-days window for a US company to jump in with a purchase and run an independent US operation.

The Trump Administration may not have plunged a dagger into TikTok’s heart, but it is suffocating it out of existence. Picture: AFP

US President Donald Trump can easily effect a ban on video sharing platform TikTok and messaging service WeChat by making it impossible for US companies to transact with them.

Mr Trump on Friday issued separate executive orders for the services. In both cases, the bans don’t kick in for 45 days. This offers a window for a US company to buy at least the US operation of those companies and run them as independent US operations.

Microsoft has already held negotiations with TikTok’s parent China’s ByteDance, saying it is interested in taking over TikTok in the US, Australia, New Zealand and Canada.

This idea is fraught with difficulty because it means either splitting TikTok’s audience and their media, which makes it a less attractive platform. For example, TikTokers in Australia wouldn’t enjoy the content of users in Brazil, and visa versa.

If you don’t split the user base and content, you risk the original problem of all TikTok data flowing over into ByteDance’s operation.

After 45 days, prohibitions come into place that makes TikTok’s (and WeChat’s) operation untenable.

The approach is not unlike how the US tackled Huawei. The order prohibits any person from transacting with TikTok parent ByteDance that is subject to US jurisdiction after the 45 days expires.

­This suffocates TikTok’s operation.

First, US companies won’t be able to run ads on TikTok which basically ends TikTok’s US revenue stream. ByteDance won’t be able to negotiate with cloud providers to hold the personal details and media of TikTok US users within the US. Holding local data within the US was one of the promises TikTok made.

Apple and Google won’t be allowed to transact with TikTok to make its app available in their respective app stores. Worst of all, the ban will prevent the carriage of TikTok data at the network level.

Putting this together: no US network access, no apps in the app store, no advertisers, no revenue and no local cloud storage capacity would make TikTok’s operation in the US untenable.

The Trump Administration may not have plunged a dagger into TikTok’s heart, but it is suffocating it out of existence.

This is not unlike what has happened with Huawei phones in Australia.

Some organisations banned Huawei phones outright but without the collaboration of US companies, their phones cease to be attractive to Australian consumers. They can’t run Google’s standard Android operating system (only an open source version), download Google apps or play YouTube content in the app in the standard way.

There are workarounds, for example you can play YouTube content through the phone’s browser. But why bother with this, when you can do it easily by buying a different branded phone?

In his executive order, Mr Trump said TikTok had been downloaded more than 175 million times in the US and more than a billion times globally.

“TikTok automatically captures vast swathes of information from its users, including internet and other network activity information such as location data and browsing and search histories,” he said.

He said the data collection potentially let China track the locations of US federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.

“TikTok also reportedly censors content that the Chinese Communist Party deems politically sensitive, such as content concerning protests in Hong Kong and China’s treatment of Uighurs and other Muslim minorities.”

He said TikTok would be used for disinformation campaigns.