The owner of TikTok said he will “strictly adhere” to new rules imposed by China on technologies that the country’s companies can sell overseas.
Export controls could potentially be used to block the sale of TikTok’s US operations.
The extended list of restricted items covers some of the methods the app uses to target who sees which videos.
The app’s ability to quickly identify and satisfy users’ interests has played an important role in its success.
Bytedance has entered into negotiations to sell the American, Canadian, Australian and New Zealand division of TikTok after President Donald Trump threatened to ban the app in the United States, where it has approximately 100 million members.
The president cited national security concerns, despite the company denying it would give Chinese authorities access to foreign user data.
The US government has granted the company until mid-September to secure an alternative sale.
Microsoft and WalMart have teamed up to make a joint bid, while database specialist Oracle is considering an offer of its own.
However, Bytedance faced criticism in her home country for being seen succumbing to foreign pressure to sell a valuable asset.
quoted a government adviser who said Bytedance should “seriously and carefully consider” the suspension of clearance talks in order to comply with the revised export rules.
Ban on sales AI
Beijing added 23 items to its catalog of export-restricted technologies on August 28, the first time it changed the list since 2008.
It now includes two “civilian” technologies that could have a direct impact on TikTok:
- interactive interfaces powered by artificial intelligence
- personalized recommendations and notifications based on data analysis
In theory, Bytedance should seek permission to sell the use of any related technology to a foreign entity, and it may take up to a month to get preliminary approval.
If the company were prohibited from including TikTok’s recommendation engine as part of a sale, the app would effectively be paralyzed.
This would mean that a buyer would have to develop their own referral system, making the smooth transfer of control difficult.
Lawyer Erich Andersen added: “We are studying the new regulations that were released on Friday. As with any cross-border transaction, we will follow the applicable laws, which in this case include those of the United States and China.”
In other related developments:
- TikTok denied considering selling itself to rival the Triller video sharing app and a London-based investment firm. He told CNBC that “we are not and will not be in talks with them – however, we are flattered by how much they admire TikTok”
- Advisors to the British prime minister are divided over whether Boris Johnson should publicly declare that he is in favor of Bytedance setting up a global headquarters for TikTok’s remaining London operations, according to a Times report. He quoted a government source who said it was a “very sensitive” issue.
- An online poll suggested that 40% of US adults support Trump’s intervention, while 30% oppose it. The survey of 1,349 adults was conducted by Reuters and Ipsos last week
- United States