TR Daily Commerce Orders U.S. App Stores to Pull WeChat, TikTok
Friday, September 18, 2020

Commerce Orders U.S. App Stores to Pull WeChat, TikTok

The U.S. Commerce Department today ordered U.S.-based app stores to remove the TikTok and WeChat apps beginning Sunday, one of several steps designed to ban certain “transactions” between U.S. entities and the apps’ Chinese parent companies.

The TikTok prohibition covers “any provision of services to distribute or maintain the TikTok mobile application, constituent code, or application updates through an online mobile application store, or any online marketplace where mobile users within the land or maritime borders of the United States and its territories may download or update applications for use on their mobile devices,” according to a “Federal Register” notice due to be published next Tuesday.

A separate “Federal Register” notice outlines similar prohibitions on WeChat, a messaging, social media, and mobile payment app owned by Tencent Holdings Ltd., a Chinese conglomerate based in Shenzhen.

The Commerce Department actions were dictated by an executive order issued by President Trump in August to address what the administration claims are national security risks associated with TikTok and WeChat, which are suspected of sharing data about U.S. users with the Chinese government (TR Daily, Aug. 7).

The administration for now has taken a more lenient approach toward TikTok and its parent company, Beijing-based ByteDance Ltd., than it has toward WeChat and Tencent. In addition to being banned from U.S.-based app stores, much of the network infrastructure that supports WeChat’s U.S. operations will have to be shut down by U.S. providers by Sunday, according to the Commerce Department’s order.

The order prohibits U.S. providers from offering a range of services to WeChat, including web hosting, content delivery, and Internet peering. The administration intends to make it nearly impossible for WeChat to do business in the U.S., although the order contains an exception for “the exchange between or among WeChat mobile application users of personal or business information using the WeChat mobile application, to include the transferring and receiving of funds.”

“These prohibitions only apply to the parties to business-to-business transactions and do not extend to WeChat users who use the app for personal communications,” the administration explained to a federal court hearing a lawsuit filed by WeChat users who said the administration’s actions would disrupt the business transactions, personal communications, and religious activities of the “Chinese diaspora” within the U.S. (TR Daily, Aug. 24).

U.S. users of WeChat “need not fear criminal prosecution or civil enforcement for personal use of the WeChat app to communicate with friends and family, read the news, engage in political debate, or participate in religious activities,” the administration told the U.S. District Court for the Northern District of California.

The prohibitions on WeChat and TikTok also won’t apply to “payment of wages, salaries, and benefit packages to employees or contractors,” according to the “Federal Register” notices.

The administration’s more lenient approach toward TikTok is designed to give ByteDance a chance to arrange the sale of TikTok to U.S.-based investors to alleviate concerns about TikTok’s sharing of U.S. user data with the Chinese government.

“For all practical purposes, [WeChat] will be shut down in the U.S.” as of Sunday, Commerce Secretary Wilbur Ross told Fox Business News. TikTok, on the other hand, will be available to existing U.S. users until Nov. 12, albeit without any updates that might be delivered through a U.S.-based app store, he said.

In the latest proposal by U.S. investors to acquire TikTok, Oracle Corp. and Walmart, Inc. reportedly would purchase some portion of TikTok’s assets. TikTok would arrange an initial public offering of shares in the U.S., and Walmart would have a seat on the new company’s board. Oracle’s initial plan to serve as TikTok’s “trusted technology provider” in the U.S. appeared to fall short of the Trump administration’s goals and was criticized by some Senate Republicans (TR Daily, Sept. 16).

Any transaction involving TikTok’s U.S. assets will be reviewed by the Committee on Foreign Investment in the U.S. (CFIUS), and ByteDance has until Nov. 12 to reach a satisfactory deal.

ByteDance, which is challenging the administration’s efforts to shut down TikTok in federal court, today said it was disappointed in the Commerce Department’s decision to have the app removed from U.S.-based app stores.

“In our proposal to the U.S. administration, we've 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,” a spokesperson said.

“Further, an American technology provider would be responsible for maintaining and operating the TikTok network in the U.S., which would include all services and data serving U.S. consumers. We will continue to challenge the unjust executive order, which was enacted without due process and threatens to deprive the American people and small businesses across the U.S. of a significant platform for both a voice and livelihoods," the spokesperson added.

Vanessa Pappas, TikTok’s interim head, said on Twitter that other social media firms should consider joining the fight against the administration’s actions. “We agree that this type of ban would be bad for the industry. We invite Facebook and Instagram to publicly join our challenge and support our litigation. This is a moment to put aside our competition and focus on core principles like freedom of expression and due process of law,” she said.

Critics of the administration’s actions noted that, without access to security updates from app stores, U.S. users of TikTok and WeChat risked having their accounts breached.

“The actions announced today put consumers at risk by cutting them off from software updates, including necessary security updates. In addition, prohibiting intermediaries such as Internet service providers and content delivery networks from optimizing their networks to deliver TikTok content imposes an unnecessary and unfair burden on U.S. companies,” said Daniel Castro, vice president of the Information Technology & Innovation Foundation.

“If the administration wants to pressure China to allow U.S. companies to operate in the Chinese market, then it should be clear on that goal. However, if the administration decides to ban these apps altogether, it should explicitly prohibit these companies from operating in the United States while following due process,” Mr. Castro said.

“In comparison to this de facto ban, striking a deal with an American company is clearly in the best interest of all parties. These actions today undermine that goal and make a deal less likely. The administration should reconsider its position and pursue policies that do not further fragment the global Internet,” he added.

The American Civil Liberties Union said the actions against TikTok and WeChat would curtail users’ constitutional rights. “This order violates the First Amendment rights of people in the United States by restricting their ability to communicate and conduct important transactions on the two social media platforms,” said Hina Shamsi, director of the ACLU’s National Security Project.

“The order also harms the privacy and security of millions of existing TikTok and WeChat users in the United States by blocking software updates, which can fix vulnerabilities and make the apps more secure. In implementing President Trump’s abuse of emergency powers, Secretary Ross is undermining our rights and our security. To truly address privacy concerns raised by social media platforms, Congress should enact comprehensive surveillance reform and strong consumer data privacy legislation,” she said.

Senior Commerce Department officials, however, disputed assertions that the orders would undermine the security of U.S. users of the apps by denying them access to security updates.

“The argument that we’re eroding security because we’re not allowing an untrusted entity to push security updates to apps that are already untrusted on its face kind of falls flat,” one official said during a background briefing for reporters.

The officials indicated that the federal government was probably unable to completely end the use of the apps in the U.S. “We expect that individual users probably will find ways to use these applications,” one official said.

But the orders will tend to degrade the services, drive users to competing apps, and significantly reduce the amount of data about U.S. users that flow to China, they said, and they insisted that the administration’s effort was needed to protect national security.

“It is well-known and documented that the parent companies Tencent and ByteDance work very closely with the Chinese security agencies in China for propaganda purposes, for surveillance purposes, and for data-collection purposes,” an official said.

The Commerce Department hinted that future action might be forthcoming against other Chinese apps or against other properties of Tencent that operate in the U.S.

“Any other prohibitive transaction relating to WeChat or TikTok may be identified at a future date. Should the U.S. government determine that WeChat’s or TikTok’s illicit behavior is being replicated by another app somehow outside the scope of these executive orders, the president has the authority to consider whether additional orders may be appropriate to address such activities,” the department said. —Tom Leithauser, [email protected]

MainStory: Cybersecurity FederalNews InternationalNews InternetIoT

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