China Intervenes in TikTok Deal

Posted on August 29, 2020 by Paul Thurrott in Cloud, Microsoft, Social with 16 Comments

With TikTok poised to sell its non-Chinese assets to Microsoft or Oracle, China took steps to intervene in any deal.

Today, China updated its export control rules.

“In accordance with the Foreign Trade Law of the People’s Republic of China and the Regulations of the People’s Republic of China on the Administration of Technology Imports and Exports, the Ministry of Commerce and the Ministry of Science and Technology have made partial adjustments to the contents of the China List of Prohibited Export Restricted Export Technologies,” a translated version of the announcement reads. “It belongs to dual-use technology and is incorporated into export control management.”

The phrase “dual-use” refers to technology that could have both civilian and military use. And among the changes is a list of over 50 technologies that China now considers too sensitive for sale outside of the country, including one that sounds a lot like TikTok’s recommendation service. If this is accurate, then ByteDance, TikTok’s owner, would need a license to sell this technology to a U.S.-based company.

It’s not clear if China is making the change to block the sale of TikTok or to help dictate better terms. And it’s possible that this last-minute intervention could frighten off Microsoft or Oracle, or at least slow down the acquisition process, which seemed on the verge of culminating at any time.

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