CEO Mayer jumps ship as TikTok fights ban in courts

Former Disney executive has left TikTok less than three months after joining, days after the Chinese app company challenged an order from the President that seeks to ban it from doing business in the US

CEO Mayer jumps ship as TikTok fights ban in courts
TikTok has been embroiled in enormous political controversy. Former Disney executive Kevin Mayer joined as its CEO on June 1, but  quit less than three months later. Image by AFP.

(ATF) The heat in the TikTok kitchen has got too hot for Kevin Mayer, the former Disney executive who took over as CEO at the Chinese short-video company three months ago, just before it was targeted by the White House over 'national security concerns'.

News that Mayer had resigned emerged today, Thursday August 27, after weeks of political turbulence. The American will be replaced by US General Manager Vanessa Pappas on an interim basis, TikTok said.

Mayer was Walt Disney Co's top streaming executive before joining TikTok on June 1. He was also appointed as chief operating officer of TikTok's Chinese parent ByteDance.

"In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for," Mayer said in an letter to employees and reviewed by Reuters.

"Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company."

TikTok, in an emailed statement, confirmed Mayer's departure and Pappas' interim appointment. It also confirmed the contents of the letter sent by Mayer earlier in the day.

ByteDance founder and CEO Zhang Yiming said in a separate internal letter reviewed by Reuters that they were "moving quickly to find resolutions to the issues that we face globally, particularly in the US and India".

He said Mayer had joined just as the company was "entering arguably our most challenging moment."

"It is never easy to come into a leadership position in a company moving as quickly as we are, and the circumstances following his arrival made it all the more complex," Zhang said.

'Seven deadly sins'

US President Donald Trump issued an executive order banning US transactions with TikTok on August 6, effective in mid-September. He then issued a separate order on August 14 giving ByteDance 90 days to divest of TikTok's US operations and any data TikTok had gathered in the country.

But on Monday this week (August 24), TikTok's international edition filed a complaint with US judicial authorities to try to block and rescind the president's order.

According to China News Network, Tiktok believes it has a case against the executive order. It alleges that Trump committed "seven deadly sins" – violating the constitution four times and exceeding his powers (known as ultra vires actions) three times. 

Unlike India, which just banned TikTok outright, the US administration has been playing a complicated game of pin the tail on the donkey – ordering parent company Bytedance to sell the app to a US company.

Lawyers for the TikTok insist that the process of this administrative order is unconstitutional, because the top-level notifications to ByteDance and TikTok did not given them any opportunity to appeal. That violated the due process provisions under the Fifth Amendment to the US Constitution, they said.

The basis of the executive order is illegal and constitutes an ultra vires act, they say.

The International Emergency Economic Powers Act grants the US President the power to restrict and control economic transactions in order to protect national security, foreign policy and the economy, based on a state of emergency in response to "abnormal conditions and special threats". But Trump's executive order used vague expressions such as "potential", "probable", and "reportedly" throughout the article, and gave no evidence of an actual threat caused by TikTok.

'Data harvesting'

It is widely believed that Bytedance provides worldwide TikTok user data to the Chinese government, for use in sophisticated propaganda and influence campaigns, among other potential uses. If nothing else, the issue has highlighted the vulnerabilities that users of mobile-phone apps may be exposed to, in regard to unwanted data harvesting.

Bytedance says it does not provide its data to the Chinese government, which may be impossible to prove either way.

The complaint lodged with the US court revealed that ByteDance has been trying to communicate with the US government for nearly a year, since October 2019. However, US agencies allegedly refused to contact Bytedance about its concerns.

According to lawyer Wang Xinrui, a senior partner of Beijing Anli Law Firm, the International Emergency Economic Powers Act (IEEPA), on which the executive order is based is an implementation rule of the National Emergency Law. Therefore, according to the law, the US Congress has the right to pass joint resolutions to end the state of emergency, or introduce laws to restrict the president’s power in IEEPA.

Wu Fei, director of the Center for Public Diplomacy and Strategic Communication of Zhejiang University, said that the TikTok affair has been a wake-up call for China. That is, if TikTok – the short-video app popular with many millions of teenagers – is banned in the United States, it may mean that moves by China to globalise such industries will be very difficult.

TikTok told a reporter from China News Agency that the company had a "worst-case scenario plan" to shut down its business in the US. But any shutdown would involve more than 1,500 TikTok employees and thousands of partners in America, so the company is "intensively evaluating the damage to the legitimate rights and interests of employees, users, and partners after the potential shutdown, and simultaneously preparing ‘protection plans'."

President Trump issued a similar diktat to Tencent’s WeChat. Tencent has investments in a diverse range of US businesses, so it has lobbied hard to reverse the ban, or come to an acceptable compromise.

Sale talks

ByteDance has been in talks to sell TikTok's North American, Australian and New Zealand operations, which could be worth $25 billion to $30 billion to companies including Microsoft Corp and Oracle Corp, people with knowledge of the matter have said.

The company has also been targeted in India, where TikTok was one of 59 Chinese apps banned by the Indian government in June following a border clash between India and China.

That month, Mayer wrote to India's government saying China's government has never requested user data, nor would TikTok turn it over if asked.

Pappas joined TikTok in January 2019 as US general manager. She was previously global head of Creative Insights at Google's YouTube, her LinkedIn profile showed.

with reporting by Reuters

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