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TikTok and WeChat avert US ban for one more week

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TikTok and WeChat avert US ban for one more week 3

TikTok announced just last week that it had chosen Oracle to be its technology “partner” in the US, as it looked to avert a ban in one of their biggest markets. Unsurprisingly though, it turns out this was not enough to appease US president Donald Trump, who wanted something more akin to an acquisition, and it appeared a ban was still on the cards for both TikTok and WeChat.

While the ban was supposed to take effect at the end of this weekend, TikTok, along with WeChat, went to the courts to fight for its case and won a temporary reprieve according to Reuters, with the ban postponed until September 27.

TikTok and WeChat avert US ban for one more week 4

So what is going to happen to the apps this coming week? For TikTok it appears it’s still hard at work behind the scenes, with Trump proclaiming he has in principle approved of a deal which will see Oracle and Walmart becoming part owners of TikTok’s developer, ByteDance. This is all subject to approval from the Chinese government as well, who might easily decide against it and the app could easily see itself banned at the end of the week even though the Oracle partnership was supposed to alleviate many of the security flaws that the US government claimed it found.

As or WeChat, it’s not exactly clear what owners Tencent are intending to do about the problem other than challenge the ban from a legal perspective. While their pending ban hasn’t been in the news as much as TikTok and the app isn’t as popular in the US as it is in many Asian and African markets, it would still be a big loss to the company to lose out on the lucrative US market.

Given that Tencent is far bigger than ByteDance in market value, it is unlikely it would ever sell WeChat or pursue any form of acquisition. If TenCent can’t come right in the courts, WeChat would probably end up being banned. Or the US votes Trump out and a new president goes in a different direction.

Last Updated: September 21, 2020

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