China may have played its trump card against the US. As the US keeps pushing TikTok to sell to a US company, China has thrown a wrench into any possible deals.
China’s Export Control Rules
The Verge reports that the talks between TikTok and potential US buyers have hit a roadblock. This roadblock involves the app’s “For You” page, which The Verge says is the most critical part of the app.
— The Verge (@verge) September 3, 2020
With China updating its export control rules, TikTok may have to get a government license to sell to a US firm. The new export control rules cover TikTok’s For You page since the new policies cover recommendation algorithms. People expect China to cite this policy to block any US-TikTok deal.
Several US companies are still working out possible deals with TikTok, which could amount to $30 billion. Among them are Microsoft, Twitter, Walmart, and Triller.
Why Is TikTok’s “For You” Page Important?
TikTok’s For You page is the reason millions of people use the app. The page gives you an endless stream of exciting content based on your viewing habits. Any US firm buying a For You-less version of TikTok would own a shadow of its former self. With China’s move, several US bidders are now scrambling to salvage the deal. However, the deal is too complex for any quick solution.
US President Donald Trump has stressed that TikTok should sell by September 15, or else it faces a total ban. He has even said he wants the US Treasury to receive a cut of the sale. TikTok responded by suing his administration. As of now, it’s unclear how the US solves this issue.