US President Trump can approve or deny a transaction but has already voiced support for Oracle as a ‘great company’.
A United States federal judge has blocked President Donald Trump’s attempts to ban TikTok, the latest legal defeat for the administration as it tries to wrest the popular app from its Chinese owners.
The Trump administration had tried to ban the short-form video app from smartphone app stores in the US and cut it off from vital technical services. TikTok sued, arguing such actions would violate free speech and due process rights.
Judge Carl Nichols of the US District Court in Washington, DC said in a ruling on Monday that the Commerce Department “likely overstepped” its use of presidential emergency powers “and acted in an arbitrary and capricious manner by failing to consider obvious alternatives”.
Nichols is the second federal judge to fully block the Trump administration’s economic sanctions against the app as the court cases proceed.
The Trump administration has alleged that TikTok is a security threat because the Chinese government could spy on app users’ personal data. TikTok has denied it is a security threat but said it is still trying to work with the administration to resolve its concerns.
Trump in September gave his tentative blessing to a proposal by ByteDance, the Chinese company that owns TikTok. ByteDance’s plan was meant to resolve US national security concerns by having the US companies Oracle and Walmart invest in TikTok. Oracle would manage US user data under the arrangement, but a federal agency would still have to review and finalise an arrangement.
A government deadline for ByteDance to complete the deal passed on Friday, and it’s not clear what the status of the agreement is.
The Treasury Department, which chairs the agency reviewing the deal, said Friday that the agency “is engaging with ByteDance to complete the divestment and other steps necessary to resolve the national security risks arising from the transaction”.
The Trump administration’s aggressive tactics are part of its latest attempt to counter the influence of China. Since taking office in 2017, Trump has waged a trade war with China, blocked mergers involving Chinese companies and stifled the business of Chinese firms like Huawei, which manufactures phones and telecom equipment.
While President-elect Joe Biden has said TikTok is a concern, it’s not clear whether his administration will carry on the Trump administration’s ongoing attempts to secure a ban, or increase the involvement of US companies.