US delays TikTok legal cases, stalls on stake sale policy reversal reports

The Biden administration moved to put on hold legal cases started by Trump to restrict use of TikTok, but denied reports that a policy of trying to force a merger with Oracle and Walmart of TikTok's US assets had been abandoned completely

US delays TikTok legal cases, stalls on stake sale policy reversal reports
The Biden administration wants to buy some time to develop a new TikTok policy, giving the company scope to press on with its own US sales plans. File picture: Reuters

(ATF) The Biden administration on Wednesday February 10 moved to freeze cases that attempted to restrict use of TikTok in the US, but a presidential spokeswoman denied reports that a plan to endorse a stake sale of TikTok's US assets to Oracle and Walmart had been abandoned completely.

The US Justice Department asked two federal appeals courts to put on hold government appeals of lower court rulings blocking restrictions the Trump administration tried to impose on TikTok.

Three federal judges in separate rulings had previously blocked orders limiting TikTok and WeChat, another Chinese-owned app.

The Justice Department told appeals courts for the District of Columbia and the Third Circuit that the Commerce Department “plans to conduct an evaluation of the underlying record justifying those prohibitions” to determine if they are warranted by the national security threat Trump described.

Late on Wednesday, the Third Circuit agreed to cancel oral arguments that had been set for Thursday and directed the government to file a status report in 60 days.

The White House earlier said it is conducting an ongoing review of risks TikTok may present to US data but stressed it has taken no new “proactive step” related to a previous plan for Oracle and Walmart to acquire TikTok’s American operations.

White House press secretary Jen Psaki said: “It is not accurate to suggest that there is a new proactive step by the Biden White House” related to TikTok.

Review of data risks

She said the administration was still conducting a comprehensive review of the “risks to US data ... including from TikTok, and will address them in a decisive and effective fashion.”

Different media reports including by Reuters and the Wall Street Journal said that the plan to push through a TikTok stake sale in the US had either been abandoned completely or put on hold indefinitely by the Biden administration.

As uncertainty over its regulatory treatment continues, TikTok is pressing on with plans to expand in the US.

TikTok confirmed to ATF this week that a US advertising push is underway, while trying to place the move in the context of normal business expansion.

“We started previewing ad products that we will be focusing on more in 2021, and supporting our e-commerce ecosystem with more advertising solutions is a priority. These are just in the testing phases,” a spokeswoman said.

TikTok is reportedly planning an aggressive push to win e-commerce business in the US from Facebook, which along with Google dominates online ads at the moment.

TikTok is also trying to win over providers of music by offering them potentially bigger earnings in the form of “equitable compensation” for use of their content online, in a deal announced on Monday with UMG, the biggest music company in the world.

TikTok’s aggressive expansion steps indicate that the firm is increasingly confident that it will be able to manage the political and regulatory risks from continuing tensions between the US and China.

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US-China TikTok court case delays Biden administration Oracle Walmart US Justice Department