President Donald Trump on Thursday issued executive orders banning any U.S. transactions with Chinese tech firms Tencent and ByteDance.
Tencent owns the Chinese messaging app WeChat, and ByteDance is the Beijing-based parent company of the widely popular short-video-sharing app TikTok.
The ban will take effect in 45 days, making the deadline for the popular applications on September 21, 2020.
According to 2 separate Executive Orders issued by President Trump on Thursday, the main reasoning for the banning of the social media music app TikTok, and the popular messaging/payment app WeChat is due to the following:
I, DONALD J. TRUMP, President of the United States of America, find that additional steps must be taken to deal with the national emergency with respect to the information and communications technology and services supply chain declared in Executive Order 13873 of May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain). As I explained in an Executive Order of August 6, 2020 (Addressing the Threat Posed by Tiktok, and Taking Additional Steps to Address the National Emergency With Respect to the Information and Communications Technology and Services Supply Chain), the spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States. To protect our Nation, I took action to address the threat posed by one mobile application, TikTok. Further action is needed to address a similar threat posed by another mobile application, WeChat.
In laymen’s terms, President Trump is stating that because the apps are owned by companies in China, that they are gathering and sending data on US citizens for use by the People’s Republic of China Government and thus also the Chinese Communist Party, making these apps a spying app against the freedoms of US citizens. In addition to collecting data for use by the CCP, Trump states that the app TikTok also “censors opinions that the CCP do not agree with” and “spreads debunked conspiracy theories about the origins of the 2019 Novel Coronavirus to the benefit of the Chinese Communist Party”. The accusation of TikTok being used as a data-gathering platform by the CCP has been denied time and time again by parent company ByteDance and members of the TikTok management
TikTok, formerly the app musical.ly, has over 800 million users worldwide. TikTok allows users to make up to one minute of video on the subject matter they want. A lot of users use the app to make videos dancing to various clips of music, record pet videos, make funny short skits or just record random weird moments. But this has not been without its fair share of controversy both internally and externally.
TikTok is owned by ByteDance, a Chinese multinational internet technology company headquartered in Beijing. The company has an internal committee of the Chinese Communist Party as well as strategic partnerships with Chinese Communist Party-supported ventures in Beijing and Shanghai. This has garnered a theory about the CCP having control over what gets seen by the public on the app, leading to many videos being censored, removed, “shadowbanned”, and accounts suddenly disappearing from the app altogether when the subject matter has not been seen as beneficial to Chinese culture or interests.
On 3 April 2019, the Madras High Court while hearing a PIL had asked the Government of India to ban the app, citing that it “encourages pornography” and shows “inappropriate content”. The court also noted that children and minors using the app were at risk of being targeted by sexual predators. The court further asked broadcast media not to telecast any of those videos from the app. The spokesperson for TikTok stated that they were abiding by local laws and were awaiting a copy of the court order before they take action.
On 17 April, both Google and Apple removed TikTok from Google Play and the App Store in India. As the court refused to reconsider the ban, the company stated that it had removed over 6 million videos that violated its content policy and guidelines.
On 25 April 2019, the ban was lifted after a court in Tamil Nadu reversed its order of prohibiting downloads of the app from the App Store and Google Play, following a plea from TikTok developer Bytedance Technology.
On 29 June 2020, the Ministry of Electronics and Information Technology banned TikTok along with 58 other Chinese apps stating a threat to the sovereignty and security of the country after the military clash between Indian and Chinese troops in the disputed territory along their shared border in Ladakh. The Indian government said the decision to ban the apps was to protect the data and privacy of its 1.3 billion citizens and put a stop to technology that was “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers outside India”.
It looks like Trump is following the example set by the Indian Government with its ban, a lot of the same wording is used in the Executive Order along with referencing the ban that India put in place:
TikTok, a video-sharing mobile application owned by the Chinese company ByteDance Ltd., has reportedly been downloaded over 175 million times in the United States and over one billion times globally. TikTok automatically captures vast swaths of information from its users, including the Internet and other network activity information such as location data and browsing and search histories. 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.
These risks are real. The Department of Homeland Security, Transportation Security Administration, and the United States Armed Forces have already banned the use of TikTok on Federal Government phones. The Government of India recently banned the use of TikTok and other Chinese mobile applications throughout the country; in a statement, India’s Ministry of Electronics and Information Technology asserted that they were “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India.” American companies and organizations have begun banning TikTok on their devices. The United States must take aggressive action against the owners of TikTok to protect our national security.
Along with TikTok, President Trump issued the second Executive Order against WeChat, a Chinese multi-purpose messaging, social media, and mobile payment app. WeChat currently has over 1 Billion active users worldwide, using the app for communication internationally and locally, and mostly electronic payments in China and surrounding countries. Many markets, from locally, owned and operated craft markets to major retailers in the area rely on WeChat as one of its primary methods of payment, much like PayPal is used online.
The claims against WeChat echo the ones made against TikTok.
WeChat, a messaging, social media, and electronic payment application owned by the Chinese company Tencent Holdings Ltd., reportedly has over one billion users worldwide, including users in the United States. Like TikTok, WeChat automatically captures vast swaths of information from its users. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information. In addition, the application captures the personal and proprietary information of Chinese nationals visiting the United States, thereby allowing the Chinese Communist Party a mechanism for keeping tabs on Chinese citizens who may be enjoying the benefits of a free society for the first time in their lives. For example, in March 2019, a researcher reportedly discovered a Chinese database containing billions of WeChat messages sent from users in not only China but also the United States, Taiwan, South Korea, and Australia. WeChat, like TikTok, also reportedly censors content that the Chinese Communist Party deems politically sensitive and may also be used for disinformation campaigns that benefit the Chinese Communist Party. These risks have led other countries, including Australia and India, to begin restricting or banning the use of WeChat. The United States must take aggressive action against the owner of WeChat to protect our national security.
However, there is more to the WeChat Executive Order that people have noticed with the wording against WeChat’s parent company Tencent. According to the Executive Order:
Section 1. (a) The following actions shall be prohibited beginning 45 days after the date of this order, to the extent permitted under applicable law: any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (a.k.a. Téngxùn Kònggǔ Yǒuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order.
The wording in question comes in relation to “any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (a.k.a. Téngxùn Kònggǔ Yǒuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order.” By naming Tencent as a company and any subsidiary it has under its very large umbrella of companies, it can affect other arms of the Tencent company; namely video games and entertainment media.
Tencent Holdings has a considerable investment in many video game companies, from developers to publishers and beyond. Among its known investments, as of May 2020, include:
- Full ownership of Riot Games, the American developers of Valorant and League of Legends
- Full ownership of Norwegian publisher Funcom.
- Full ownership of Swedish developer Sharkmob, founded in 2017 by ex-Ubisoft developers and fully acquired by Tencent in 2019.
- 80% ownership in the New Zealand company Grinding Gear Games, the developers of the game Path of Exile.
- Approximately 84% ownership in Finnish mobile game developer Supercell, makers of Clash of Clans and Clash Royale
- 40% ownership of American developers Epic Games, the developer of popular online game Fortnite
- 20% ownership of Japanese publisher and developer Marvelous which owns G-Mode and the majority of Data East’s intellectual properties including BurgerTime, Joe & Mac, and Magical Drop franchises.
- 18.6% ownership of Chinese company iDreamSky, which mainly develops and publishes mobile games for the Chinese market.
- 5% ownership of Chinese company Century Huatong, which operates games developed by FunPlus. Tencent became a shareholder through investment in Century Huatong’s subsidiary Shengqu Games.
- 17.66% ownership of South Korean mobile developer Netmarble.
- Approximately 15% ownership of American mobile game developer Glu Mobile
- 13.54% ownership of South Korean company Kakao, the parent company of South Korean publisher Kakao Games.
- 9% ownership in UK developer Frontier Developments
- 5% ownership of American holding company Activision Blizzard, the parent company of Activision, Blizzard, and King
- 5% ownership of Swedish publisher Paradox Interactive
- 5% ownership in France’s Ubisoft, purchased from Vivendi following Vivendi’s failed attempt to buy out Ubisoft in March 2018
- 1.5% ownership of South Korean company Bluehole, the publisher of PlayerUnknown’s Battleground
- Majority ownership in Switzerland-based mobile game developer Miniclip
- Capital Investment in Japanese developer PlatinumGames
- Minority share in German developer Yager Development
Should this ban go into effect without challenge, it could affect these companies from obtaining funding for future projects through to complete banning of the properties for sale in the United States. Outside of video games, Tencent has a media arm called Tencent Pictures, a film distributor and a production company that creates and distributes films based on books, comic books, animated series, and video games. Over the years Tencent Pictures has invested in the following films, some of which are still awaiting release:
- Warcraft
- Kong: Skull Island
- Wonder Woman
- Venom
- Bumblebee
- Men in Black: International
- Terminator: Dark Fate
- Monster Hunter
- Top Gun: Maverick
- Wonder Woman: 1984
- A Beautiful Day in the Neighborhood
At the moment, due to the very vague wording in the Executive Orders written by President Trump, it looks less like he is going after 2 apps for communication and data gathering problems, but furthering his attack against China by attacking some of the biggest Chinese owned companies that have huge links to the United States and international interests. Once the orders go into effect on September 21, 2020, we will see what happens. However, people should not be too worried at this time as the Executive Orders can be overturned by the Supreme Court or even Congress at any time in the next 45 days. Though there has been a mass exodus of US users from TikTok since rumors of this Executive Order matter was brought to light over a week ago.
There is going to be more to this story as it develops over the next 45 days and The Outerhaven will be keeping an eye on this as they happen.
