On Thursday US President Donald Trump issued executive orders to ban the social media app TikTok. After 45 days, if the app is not sold by their Chinese-owned parent company, the order will stop "any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd."
The video-sharing app came under fire over national security concerns: the order states indeed that TikTok "automatically captures vast swaths of information from its users", the collection of such data "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."
The order also claims that the platform censors or disseminates content that the Chinese Communist Party deems sensitive, such as protests in Hong Kong, China's treatment of Uyghurs and other Muslim minorities and "debunked conspiracy theories about the origins of the 2019 Novel Coronavirus."
The deadline to find a US buyer for TikTok was set to September 15, after that date, the app will be shut down in the country. Trump also said (but the order doesn't state this) that a substantial amount of money from the deal would have to be sent to the US Treasury Department.
In a way, rather than being about protecting America, this move feels a bit more like a revenge: TikTok has indeed recently turned into an energetic platform for activism and in June users organised a stunt through the app, registering online for the free tickets to a Trump campaign rally in Tulsa, Oklahoma, but then not turning up at the event that ended up being sparsely attended.
Microsoft is in talks to acquire the video-sharing app, but Trump also issued a similar order for WeChat, a popular texting app owned by Tencent, a China-based company.
This popular social media platform boasts over 1.15 billion monthly active users in China, its mini-programs are also increasingly used by retailers to sell their products. Most Western messaging apps are banned in China, but US-based WeChat users can employ it to make business transactions, transferring funds, advertise and reach out to friends and family in China, besides, the group chat is also used as an interface for other apps.
The order states it will ban "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."
Yet, as stated above, apart from being used to communicate WeChat is employed for business transactions, something that may end up damaging those users based in the US who employ it for this purpose. Damaging WeChat may therefore mean damaging further also the US economy.
The platform's parent company, Tencent (worth $490 billion, it is the second-biggest company in Asia by market value after Alibaba Group Holdings), invested indeed in several American companies such as Tesla, Reddit and Spotify and also owns shares of American Epic Games (maker of "Fortnite") and Riot Games (and also of Finnish Supercell, for what regards videogames; Tencent Holdings actually invested in hundreds of overseas-based companies).
Tencent was initially mainly interested in videogaming companies, but in the last few years it reshifted its focus also on retail and fashion as well, also thanks to the influence of WeChat.
Last July the Qingteng Club, a group affiliated with Tencent Holdings Ltd., organised an event in California for host executives and celebrities from the Chinese and US online video industries that coincided with VidCon, a convention for fans of online influencers. The main purpose of that event was to encourage more US social-media stars to do business in China (one of the event panels was entitled "How Tencent could help your influencers' businesses in China").
In February, since Chinese buyers couldn't take part in the runways shows in Europe as their country was locked down because of Coronavirus (Italy went into lockdown shortly afterwards), the Italian Fashion Chamber launched the "China, We Are with You" initiative, 29 catwalk shows broadcast live from Milan in collaboration with Tencent, that were watched by 16 million users according to the organisers.
Around the same time, London-based fashion e-commerce platform Farfetch raised $250 million from Tencent and U.S. investment firm Dragoneer, money that the platform will use to expand in China. Through the investment, Farfetch hopes to increase the exposure of Western brands to Chinese consumers through the WeChat platform (mini-program operators sell goods from more than 80 luxury brands on the WeChat platform).
Last but not least, the partnership announced last November between Tencent and British luxury brand Burberry brought something innovative to Shenzhen, China's technology hub - the first luxury social store.
Opened at the end of July 2020, the store is based on the "phygital" experience as it combines the more traditional physical retail store environment with social worlds and immersive digital experiences. Burberry worked closely with Tencent to design the space: products are labelled with scannable QR codes and the codes unlock additional information and stories.
The retail environment also features a dedicated WeChat mini-program that offers special contents, personalisation and rewards through the Burberry social currency feature and even the store's cafe has a menu that evolves when customers engage with the WeChat mini-program, unlocking new menu items.
There are more TikTok (around 80 million U.S. monthly users) than WeChat users in America, but by banning "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," as the order states, Trump may end up banning investments made by American companies in China, some of them linked with the fashion industry (see the Farfetch deal with Tencent and U.S. investment firm Dragoneer). Trump's executive order states that the apps from China threaten "the economy of the United States", but thinking about the deals and investments of US companies in China, you realise that the economy may genuinely be damaged not by Chinese apps but by Trump's orders.
So what will happen in the future? Will it be possible to really ban TikTok and WeChat? Well, TikTok was banned earlier this year in India and it was forcibly removed from devices. But it may be even more difficult to do the same in the US, as Google, Apple and Microsoft, would have to enforce a ban and ensure users delete TikTok. Besides, there are companies in the US that collect more data from users, so if TikTok and We Chat are banned, then why not banning also Facebook?
So will Trump manage to enforce his order? We will have to wait till September to know, but, in the meantime, TikTok users are at work, thinking about ways to sidestep the ban and trick servers to make it look like they're browsing from other countries where TikTok is allowed.
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