TikTok sale faces red tape as China changes export rules

The TikTok logo on a white red and blue wallpaper

China’s press agency, Xinhua, has reported that ByteDance will have to comply with ‘approval procedures’ when it comes time to sell its U.S. TikTok operations. China’s Ministry of Commerce and the Ministry of Science and Technology jointly published new documents on Friday that added new items to an export restrictions list.

Professor Cui Fan from the University of International Business and Economics said that the specific changes that apply to TikTok include export controls on services that use ‘personalised information push service technology based on data analysis’ and ‘artificial intelligence interactive interface technology’.

Discussing the changes and their relevance to TikTok, Cui said:

“For the international business to continue to operate smoothly, no matter who its new owner and operator are, it is highly likely that there will need to be a transfer of software codes or right of use from inside China to outside China. Technical services provision from inside China to outside China may also be needed.

Therefore, it is suggested that ByteDance carefully study the revised catalogue, seriously and carefully consider whether it is necessary to suspend substantive negotiations on relevant transactions, comply with statutory application and reporting procedures, and then take further actions as appropriate.”

Last week, Neowin reported that the TikTok acquisition could wrap up in the next couple of days with Microsoft or Walmart emerging as the buyer. It’s unclear at this point whether the new export rule changes will delay the process further.

Leave a Reply