TikTok restores service in US, thanking Trump

WASHINGTON: TikTok restored service in the United States on Sunday (Jan 19) after briefly going dark, as a law banning the wildly popular app on national security grounds came into effect.

TikTok credited President-elect Donald Trump, who retakes power on Monday, for making the reversal possible - though the outgoing administration of President Joe Biden had earlier said that it would not enforce any ban.

The video-sharing app had shut down in the US late on Saturday as a deadline for its Chinese owners ByteDance to sell its US subsidiary to non-Chinese buyers loomed.

Earlier on Sunday, as millions of dismayed users found themselves barred from the app, Trump promised to issue an executive order delaying the ban to allow time to "make a deal".

He also called in a post on his Truth Social platform for the US to take part-ownership in TikTok.

The president-elect said he "would like the US to have a 50 per cent ownership position in a joint venture", arguing that the app's value could surge to "hundreds of billions of dollars - maybe trillions".

"By doing this, we save TikTok, keep it in good hands," wrote Trump, who had previously backed a TikTok ban and during his first term in office made moves towards one.

In a statement posted on X following Trump's comments, TikTok said it "is in the process of restoring service".

"We thank President Trump for providing the necessary clarity and assurance to our service providers that they will face no penalties providing TikTok to over 170 million Americans."

TikTok, which was back online in the US by Sunday afternoon, did not address Trump's call for part American ownership of the app.

Wedbush Securities analyst Dan Ives told AFP the episode "marked a big win for TikTok and a political win for Trump".

"The TikTok app was going to stay dark and Trump came to the rescue in this political game of high stakes poker between the US and China," he said.

PRESIDENT PROOF?

The law allows for a 90-day delay of the ban if the White House can show progress toward a viable deal, but so far ByteDance has flatly refused any sale.

The Biden administration said it would leave enforcement of the law to Trump.

From teenage dancers to grandmothers sharing cooking tips, TikTok has been embraced for its ability to transform ordinary users into global celebrities when a video goes viral.

But it is also rife with disinformation, and its Chinese ownership has long spurred national security fears, internationally as well as in the US.

Sunday's blackout came after the US Supreme Court on Friday upheld the legislation banning it pending any sale.

Despite the reversal, it is unclear what Trump can do to lift the ban unless ByteDance ultimately sells.

"Congress wrote this law to be virtually president-proof," warned Adam Kovacevich, chief executive of industry trade group Chamber of Progress.

Besides removing TikTok from app stores, the law requires Apple and Google to block new downloads, with the companies liable for penalties of up to US$5,000 per user if the app is accessed.

Oracle, which hosts TikTok's servers, would also be legally obligated to enforce the ban.

UNCLEAR WHAT HAPPENS FROM NOW

Law and technology professor Anupam Chander told CNA's Asia First on Monday: "I think we're all going to see what happens to Oracle, what happens to TikTok in the months to come."

He noted that some risk remains, even though Trump has told Oracle and other US tech firms that the Department of Justice would not go after them under his administration.

"Congress members have said maybe other people might go after them even if the Department of Justice doesn't go after them," Chander noted.

"The president is going to issue an order tomorrow, kind of continuing the app’s operation at least for 90 days. And he does have statutory authorisation to some extent, at least in the in the law itself, to keep TikTok alive for three more months. But it's not clear then what happens."

Trump saving TikTok represents a change in stance from his first term in office. In 2020, he aimed to ban the short-video app over concerns the company was sharing Americans' personal info with the Chinese government.

More recently, the incoming president has said he has "a warm spot in my heart for TikTok", crediting the app with helping him win over young voters in the 2024 election.

Chanders said Trump wants to continue holding onto the "winning electoral hand" that TikTok helped him to secure.

The question is whether he find some solution that satisfies Congress and keeps TikTok alive in the US, he noted.

"ByteDance isn't allowed to have any relations with a TikTok app in the United States under the law. And so what he's saying is well, maybe you can have half of the app in the United States, and so maybe ByteDance says that's actually a much better deal, and maybe we can live with that or something along those lines," Chanders added.

Not everyone in Trump's Republican Party agreed with efforts to get around the law and "Save TikTok".

Republican senators Tom Cotton and Pete Ricketts said in a joint statement: "Now that the law has taken effect, there is no legal basis for any kind of 'extension' of its effective date. For TikTok to come back online in the future, ByteDance must agree to a sale that satisfies the law's qualified-divestiture requirements by severing all ties between TikTok and Communist China."

The US has never banned a major social media platform. The law passed overwhelmingly by Congress gives the incoming Trump administration sweeping authority to ban or seek the sale of other Chinese-owned apps.

Other apps owned by ByteDance, including video editing app CapCut and lifestyle social app Lemon8, were also offline and unavailable in US app stores as of late Saturday.

Apple and Google did not immediately respond to requests for comment.

MOVE TO ALTERNATIVES

Under the law, TikTok had until Sunday to cut ties with its China-based parent or shut down its US operation to resolve concerns it poses a threat to national security.

The Chinese Embassy in Washington on Friday accused the US of using unfair state power to suppress TikTok.

"China will take all necessary measures to resolutely safeguard its legitimate rights and interests," a spokesperson said.

Uncertainty over the app's future had sent users, mostly younger people, scrambling to alternatives including China-based RedNote.

Rivals Meta and Snap have seen their share prices rise this month ahead of the ban, as investors bet on an influx of users and advertising dollars.

"HAIR ON FIRE" MOMENT

Web searches for "VPN" spiked in the minutes after US users lost access to TikTok, according to Google Trends.

Users on Instagram fretted about whether they would still receive merchandise they had bought on TikTok Shop, the video platform's e-commerce arm.

Marketing firms reliant on TikTok have rushed to prepare contingency plans in what one executive described as a "hair on fire" moment after months of conventional wisdom saying that a solution would materialise to keep the app running.

TikTok CEO Shou Zi Chew plans to attend the US presidential inauguration and attend a rally with Trump on Sunday, a source told Reuters.

Suitors including former Los Angeles Dodgers owner Frank McCourt have expressed interest in the fast-growing business that analysts estimate could be worth as much as US$50 billion. Media reports say Beijing has also held talks about selling TikTok's US operations to billionaire and Trump ally Elon Musk, though the company has denied that.

US search engine startup Perplexity AI submitted a bid on Saturday to ByteDance for Perplexity to merge with TikTok US, a source familiar with the company's plans told Reuters. Perplexity would merge with TikTok US and create a new entity by combining the merged company with other partners, the person added.

Privately held ByteDance is about 60 per cent owned by institutional investors such as BlackRock and General Atlantic, while its founders and employees own 20 per cent each. It has more than 7000 employees in the US.