The sale of the Chinese-owned social media app TikTok to a U.S. company may be shut down as China rewrites a number of export rules to give itself the power to veto certain sales, ultimately giving the communist government power over the TikTok deal.
The Wall Street Journal reports that the sale of the Chinese-owned social media app TikTok’s U.S. operations to an American company, such as Microsoft or Oracle, has been placed in peril by recent changes to China’s technology export rules which gave the country the power to veto sales.
Negotiators for TikTok’s parent company ByteDance and U.S. companies interested in purchasing the social media app were reportedly planning to continue their discussions last weekend but shelved them following the announcement of the new rules from China.
On Friday, China updated its regulations governing how technology can be exported, adding 23 new categories of technology that require government approval before being sold. Chinese officials have not explicitly stated that the sale of TikTok would be affected by these regulations, but they do add a new level of red tape to bypass for the sale to go through.
However, the WSJ cited sources that believe the update to the tech export rules which were last changed in 2008 were made with TikTok’s sale in mind. China’s Xinhua news agency appeared to confirm this in an article on Sunday citing a trade adviser to the government who said that ByteDance will “need to comply” with the new rules.
Analysts and commentators have suggested that TikTok’s operations in the U.S. could sell for more than $20 billion. Read more at the Wall Street Journal here.