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Trump says deadline for TikTok sale won’t be extended

The United States government will not extend the September 20 deadline for Beijing-based ByteDance to sell TikTok, President Donald Trump said on Thursday. This adds urgency to negotiations because TikTok may be banned in the United States if it can’t reach an agreement with a buyer.

“We’ll see what happens. It’ll either be closed up or they’ll sell it,” Trump said before boarding Air Force One at Joint Base Andrews.

Trump issued an executive order last month claiming there is “credible evidence” that ByteDance “might take action that threatens to impair the national security of the United States.” ByteDance was already in negotiations with Microsoft for a sale. Several other large American tech companies have since reportedly entered into talks with popular video-sharing app–but potential new roadblocks to a deal have also emerged.

Despite TikTok’s larger user base and value as one of the most popular social media apps among Gen Z, there are currently several issues that may lower its attractiveness for buyers.

For example, the software code used in ByteDance’s apps, including TikTok, are developed by engineers and developers at its Beijing headquarters. This makes separating TikTok from ByteDance more complicated on a technical level. Another factor is an update China made two weeks ago to export control laws that cover artificial intelligence technologies. TikTok’s AI-based algorithms, which shows new content to users depending on their interests and browsing history, are valuable and a huge part of its success. After the export control policy update was issued by China’s Ministry of Commerce, ByteDance said it will “strictly follow” the new rules, but that might prevent ByteDance from including TikTok’s personalized recommendation and AI-based technology in a sale, making it a less attractive acquisition.

In addition to Microsoft, contenders for TikTok reportedly include other American tech heavyweights like Twitter, Google and Oracle. Walmart has even put itself forward as a buyer, in a potential partnership with Microsoft.

TikTok’s security is also under a magnifying glass in several other countries. For example, it was among a roster of Chinese apps banned in India  over “national security and defence” concerns,” and is currently being investigated by French data security watchdog CNIL.

TikTok has fought back against those claims. Last month, it sued the Trump administration, stating in an announcement on August 24 that it “we strongly disagree with the Administration’s position that TikTok is a national security threat.”

In its complaint, TikTok said it has taken “extraordinary measures to protect the privacy and security of TikTok’s user data” by storing data in the U.S. and Singapore, and creating barriers between TikTok’s U.S. user data and the data of other ByteDance products like Douyin.

Since launching in 2017, TikTok, ByteDance’s international version of Douyin, has become firmly entrenched in internet culture, especially among Gen Z. In the U.S. alone, TikTok says it has over 100 million users in the U.S. and employs about 1,500 people.

Even though several apps, including Instagram, are trying to position themselves as TikTok alternatives with similar short-form video sharing features, no frontrunner has emerged so far. In fact, a new report by analytics firm Sensor Tower said that in August, TikTok was the most downloaded non-gaming app worldwide, with more than 63.3 million installs. TikTok users are so committed to the app that at least one VPN provider, ExpressVPN, saw a spike in traffic after the U.S. government proposed a potential ban in July.

Some cybersecurity experts say that TikTok’s data collection practices are similar to other social media apps that depend on advertising revenue. But a major concern revolves around its ownership by a Chinese company that may be forced to capitulate to demands for data by the Chinese government. A Chinese cybersecurity law requires Chinese tech companies, like ByteDance, to comply with government’s requests for user data. ByteDance has said it would resist attempts by the Chinese government access TikTok’s user data

Security concerns about TikTok also increased after a Wall Street Journal analysis published in August found that TikTok went around an Android operating system feature designed to limit how much data, including unique identifiers called MAC addresses, that apps can collect from users. According to the WSJ, TikTok stopped collecting unique identifiers in November, but its investigation raised questions about TikTok’s commitment to protecting user privacy. In a statement to the WSJ, TikTok said “like our peers, we constantly update our app to keep up with evolving security challenges.”

It’s not just Republicans who are taking a stance against TikTok. In July, Joe Biden’s presidential campaign reportedly asked its staff to remove TikTok from their work and personal devices.

The U.S government’s scrutiny of TikTok began escalating last year when Sens. Charles Schumer (D-NY) and Tom Cotton (R-AR) asked Joseph Maguire, then the acting director of national intelligence, to assess if TikTok can be forced to turn over American users’ data to Chinese authorities.

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Trump signs orders banning US business with TikTok owner ByteDance and Tencent’s WeChat

President Donald Trump signed an executive order on Thursday banning transactions with ByteDance, the parent company of popular app TikTok . The White House also announced that he signed a similar order banning transactions with WeChat, a messaging app that is ubiquitous in China, but has a much smaller presence than TikTok in the United States, where it is used mainly by members of the Chinese diaspora, and its owner Tencent Holdings.

Both orders will take effect in 45 days, but (and this is a key point) the executive orders are vague and confusing because they say Secretary of State Wilbur Ross will not identify what transactions are covered until then. It’s also still uncertain how the executive orders will affect the apps’ operations in the U.S.

(The Los Angeles Times reports a White House official clarified that the WeChat executive order only applies to transactions related to WeChat, not Tencent’s other holdings, which include stakes in several U.S. companies including Tesla, Snap and Spotify. But that is unclear from the language of the order).

The orders cite the International Emergency Economic Powers Act and the National Emergencies Act.  It is important to note that naming the apps’ operations in the United States as a national emergency is an act that is highly unprecedented and the legality of the orders will likely be challenged. ByteDance is currently pushing back against the Indian government’s July decision to ban TikTok along with 59 other apps; like the U.S., India also cited national security concerns around user data collection.

Microsoft announced over the weekend that it is in negotiations to buy TikTok from ByteDance, naming September 15 as a deadline for negotiations. The order would take effect shortly after the deadline set by Microsoft for the deal. ByteDance reportedly agreed to give up its entire ownership in the app even though it had previously wanted to maintain a minority stake.

Trump announced at the end of last month that he planned to ban TikTok through the use of an executive order. The president and government officials, including Secretary of State Michael Pompeo, have made escalating comments over the past few weeks alleging that TikTok is a threat to national security. While TikTok is owned by ByteDance, the Beijing-based company (which also operates a Chinese version of the app called Douyin) has taken steps to distance TikTok from its Chinese operations, and claims that its data is stored outside of China.

Trump’s executive order on ByteDance said that “the spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China…continues to threaten the national security, foreign policy, and economy of the United States. At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.”

In 45 days, transactions by any person or property subject to U.S. jurisdiction with ByteDance or any of its subsidiaries will be prohibited “to the extent that they are permitted under applicable law.” The order claims that TikTok’s access to user data including location, browsing and search histories “threatens to allow the Chinese Communist Party access to American’s 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.”

Sweeping Tencent ban

Trump’s executive order on WeChat was less expected, but not a complete surprise because Pompeo named the messaging app earlier this week when he said Trump was planning to take action “shortly” on TikTok and other Chinese companies. Like ByteDance, Trump claims WeChat’s data collection is a national security threat and may give the Chinese Communist Party access to user information. The order also cites WeChat’s censorship of material deemed politically sensitive by the Chinese government.

The scope of the order reaches beyond WeChat, restricting U.S. companies from conducting transactions with Tencent as well as its subsidiaries.

The big mystery is how the Secretary of Commerce will define “transaction” in 45 days. Trump might have just inadvertently dealt a blow to some of the biggest tech and entertainment companies in the U.S. backed by Tencent. The Chinese giant is often compared to SoftBank for its extensive investment footprint. What kinds of financial agreements are there in the majority stake cases? Dividends? Bonuses payable to board members?

Over the years, Tencent has taken stakes in Spotify, Snap, Reddit, Tesla, Warner Music, Universal Music, and lucrative games makers in the U.S. including Fortnite maker Epic Games and Riot Games, the studio behind League of Legends.

WeChat and Microsoft declined to comment. TechCrunch has also contacted ByteDance and the White House.

This story is developing and will be updated.

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Twitter plans to expand its misinformation labels—but will they apply to Trump?

President Trump is again testing Twitter’s stomach for misinformation flowing from its most prominent users.

In a flurry of recent tweets, Trump floated conspiracy theories about the death of Lori Klausutis, an intern for former congressman Joe Scarborough who was found dead in his Florida office in 2001—a freak accident a medical examiner reported resulted from a fall stemming from an undiagnosed heart condition. Scarborough, a political commentator and host of MSNBC’s Morning Joe, is a prominent Trump critic and a frequent target for the president’s political ire.

The medical evaluation and lack of any evidence suggesting something nefarious in the former intern’s death has not been enough to discourage Trump from revisiting the topic frequently in recent days.

“When will they open a Cold Case on the Psycho Joe Scarborough matter in Florida. Did he get away with murder?” Trump tweeted in mid-May. A week later, Trump encouraged his followers to “Keep digging, use forensic geniuses!” on the long-closed case.

In a statement provided to TechCrunch, Twitter expressed that the company is “deeply sorry about the pain these statements, and the attention they are drawing, are causing the family.”

“We’ve been working to expand existing product features and policies so we can more effectively address things like this going forward, and we hope to have those changes in place shortly,” a Twitter spokesperson said.

When asked for clarity about what product and policy changes the company was referring to, Twitter pointed us to its blog post on the labels the company introduced to flag “synthetic and manipulated media” and more recently COVID-19 misinformation. The company indicated that it plans to expand the use of misinformation labels outside of those existing categories.

Twitter will not apply a label or warning to Trump’s recent wave of Scarborough conspiracy tweets, but the suggestion here is that future labels could be used to mitigate harm in situations like this one. Whether that means labeling unfounded accusations of criminality or labeling that kind of claim when made by the president of the United States remains to be seen.

In March, Twitter gave a video shared by White House social media director Dan Scavino and retweeted by Trump its “manipulated content” label—a rare action against the president’s account. The misleadingly edited video showed presumptive Democratic nominee Joe Biden calling to re-elect Trump.

According to the blog post Twitter pointed us to, the company previously said it will add new labels to “provide context around different types of unverified claims and rumors as needed.”

Even within existing categories—COVID-19 misinformation and manipulated media—Twitter has so far been reluctant to apply labels to high profiles accounts like that of the president, a frequent purveyor of online misinformation.

Twitter also recently introduced a system of warnings that hide a tweet, requiring the user to click through to view it. The tweets that are hidden behind warnings “[depend] on the propensity for harm and type of misleading information” they contain.

Trump’s renewed interest in promoting the baseless conspiracy theory prompted the young woman’s widower T.J. Klausutis to write a letter to Twitter CEO Jack Dorsey requesting that the president’s tweets be removed.

In the letter, Klausutis told Dorsey he views protecting his late wife’s memory as part of his marital obligation, even in her death. “My request is simple: Please delete these tweets,” Klausutis wrote.

“An ordinary user like me would be banished from the platform for such a tweet but I am only asking that these tweets be removed.”

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