President Joe Biden signed an executive order on Wednesday setting criteria for the government to assess the risk of apps linked to foreign adversaries, a move that has an impact on Chinese websites like TikTok and WeChat.
Biden revoked and replaced the three executive orders issued by then President Donald Trump, which were intended to prohibit transactions with TikTok and WeChat by American companies. One of the orders was also aimed at banning TikTok, which led to a lengthy legal battle. TikTok remains available and popular in the US.
Biden's new order will direct the Department of Commerce to review apps linked to foreign adversaries and set out what should be considered an "unacceptable risk" according to a White House datasheet. This includes criteria for evaluating transactions with software apps that are tied to a foreign opponent. While the Committee for Foreign Investment in the U.S. [CFIUS] is considering foreign mergers or investments, the ruling cites an earlier move by Trump that broadly defines transactions as including installation or transmission with a communications technology service.
The order would consider transactions to be "increased risk" if they involve apps owned by individuals who are controlled or managed by individuals who assist foreign opposing military or intelligence agencies, or if the apps collect sensitive personal information.
The order also instructs the Department of Commerce to work with other agencies to develop recommendations on how to protect U.S. consumer data from foreign adversaries, and calls on the Department to recommend further action by the executive and legislation to address the risks.
Under the previous administration, TikTok remained in a precarious position when Trump tried to ban the app unless it sold it to an American company. The stalemate caused Walmart and Microsoft to join forces and court TikTok, although the company ultimately selected Oracle as its "trusted technology provider," which fell far short of a full sale.
Biden's rise to the White House threw the deal and the ongoing lawsuits between TikTok and the government through the bill. In February the Wall Street Journal reported that the Oracle deal had been "postponed indefinitely." The Biden government had asked the court to postpone action related to the government dispute with TikTok over the ban while it was reviewing the situation. White House press secretary Jen Psaki said at the time that a CFIUS review of TikTok was ongoing.
A TikTok spokesman declined to comment. Representatives from WeChat owner Tencent did not respond to a CNBC request for comment.
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