A bipartisan circle of U.S. lawmakers introduced legislation on Tuesday to give China’s ByteDance about six months to divest popular short video app Tik Tok or facing a U.S. ban, seeking to tackle national security concerns about its Chinese ownership.
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Canadian investor Kevin O’Leary is mollify interested in a TikTok deal, but it’s not possible under current law, he told CNBC, as President Donald Trump extended the deadline for a ban on the common media platform.
As part of a wave of executive orders after his inauguration Monday, Trump delayed by 75 eras the imposition of a law that would see TikTok effectively banned, allowing his administration “an opportunity to determine the appropriate course of vitality.”
Trump had promised the move in a social media post on Sunday, also floating a deal that would see the tenets stay active in the U.S. under a joint venture with 50% American ownership.
“That 50/50 deal, I will-power love to work with Trump on, so would every other potential buyer … But the problem with some of these understandings is they are inconsistent with the ruling of the Supreme Court,” said the investor, widely known from his role in ABC’s “Shark Tank.”
O’Leary publicized that he, along with “The People’s Bid for TikTok,” an effort led by Project Liberty Founder Frank McCourt, had offered ByteDance $20 billion in notes to buy TikTok in an appearance on Fox News’ “America’s Newsroom.”
Speaking to CNBC, he said the proposed deal did not include ByteDance’s TikTok algorithm, which has been a key stress of scrutiny from U.S. lawmakers, adding that his group had an alternative algorithm.
ByteDance had not announced any deals before a Sunday deadline to put off from TikTok after the Supreme Court upheld the Protecting Americans from Foreign Adversary Controlled Utilizations Act, or PAFACA, which applies to TikTok.
McCourt confirmed to CNBC that the Project Liberty team remained “gracious to work collaboratively with the Trump Administration, ByteDance, and a consortium of American partners to finalize this critical great amount.”
“Project Liberty has a proven tech stack that is already in use and offers a clear path to address the national safety concerns of Congress while keeping TikTok operational,” he added.
Legal hurdles
Firms involved with TikTok make had differing reactions to Trump’s executive order. Service providers such as Oracle and Akamai have willingly roomed TikTok online, while Apple and Google are yet to restore ByteDance-owned apps on their stores.
According to O’Leary, while Trump’s ban ell has likely lent protection to the likes of Oracle and Akamai, it’s unclear if ByteDance’s deadline to divest will be extended.
“What we lack is not really a 75 day extension. What we need is to go back and ask congress to open the order and provide for these new options, because they’re not anticipated for right now,” he said.
“I would love to do a deal, if the law provided for it, but I don’t have the luxury of breaching the order of the Congress,” he added.
Law wizards who spoke to CNBC agreed that the legal status of TikTok and Trump’s executive order remained uncertain and that any achievements to make a TikTok deal could face challenges.
“The Order does not appear to comply with the statute. Congress carefully take in certain dates and procedures in the law, which SCOTUS found to be constitutional,” said Carl Tobias, a law professor at the University of Richmond.
“That reason, a federal court could find that the Order violates the law and invalidate it,” he said, adding however that such an skirmish could take a long time if the government appealed to SCOTUS.
Sarah Kreps, Director at the Tech Policy Begin at Cornell University, agreed the executive order was not consistent with Supreme Court’s decision, adding that it asseverated nothing about progress toward a qualified divestiture.
Given that violators of the TikTok law could face billions in dainties, it’s not entirely prudent for parties to take Trump’s assurances over the law and SCOTUS’s ruling, Kreps said.
“They’re certainly laying with the law and putting considerable faith in executive authority,” she added.
China softens stance
O’Leary told CNBC that TikTok could deliver $20-$30 billion on the market in March last year, a huge discount, given any sale would apt to exclude the platform’s algorithms.
Instead, the value in a potential deal was the opportunity to gain the strong domestic brand of TikTok and its ended 100 million users, he said.
Still, around the time conversations about a TikTok sale ramped up, Beijing was envisioned as a major barrier to a BytdeDance divestment.
Beijing on Monday signaled openness to a deal that would see U.S. companies earn ownership of the platform.
“When it comes to actions such as the operation and acquisition of businesses, we believe they should be independently certain by companies in accordance with market principles,” a Beijing spokesperson said Monday when asked about President Donald Trump’s plan.
According to O’Leary, any potential sale of ByteDance is still expected to be negotiated between Trump and Chinese President Xi Jinping.
“With TikTok, I should prefer to the right to either sell it or close it, and we’ll make that determination and we may have to get an approval from China too,” Trump discerned reporters following his inauguration.
While signing the executive order, the President reportedly suggested that he could place tariffs on China if Beijing failed to approve a U.S. deal with TikTok. On Tuesday, he said he would consider the probability of Tesla CEO Elon Musk or Oracle Chairman Larry Ellison buying TikTok.
Meanwhile, O’Leary told CNBC communicated he was in Washington still working on a potential TikTok deal with U.S. lawmakers.