TikTok's September 20th ban looms, here's what to expect

TikTok's September 20th ban is fast approaching. Yahoo Finance's Akiko Fujita joins the On the Move panel to break down what to expect.

Video Transcript

ADAM SHAPIRO: We have to address the issue regarding the announcement from the Commerce Department regarding a prohibition on transactions relating to mobile applications, the apps WeChat and TikTok. Akiko Fujita is here to explain to us what this means. And is it anything more than no longer being able to download these apps come Sunday?

AKIKO FUJITA: Well, that's where things stand as of now. So users won't be able to get any software updates on the app as well. The restrictions for WeChat are a little more strict than that. But let me backtrack a bit to give it some context here. Because we did hear from Commerce Secretary Wilbur Ross earlier today, speaking to Fox Business, saying that what the ruling was from the department today is separate from the negotiations that are currently taking place between Oracle and Walmart and TikTok's parent company ByteDance.

So the door on that deal is not completely closed just yet. Now the September 20th deadline that we're talking about is one that was set out by that executive order the president signed back in August. And the Commerce Department saying today that the president intends to move forward with that, Ben. As you point out, the department saying as of September 20th, any provision of service to distribute or maintain the WeChat or TikTok mobile app will be prohibited.

Meaning US app stores, we're talking about Apple and Google, will no longer be able-- will be required to remove the app from downloads. The department also saying, WeChat users will be prohibited from the transferring of funds and payments through the app. That's something that will affect 19 million active users that are here in the US.

The secretary putting out a statement saying, the president's direction, we have taken significant action to combat China's malicious collection of American citizens' personal data, while promoting our national values and democratic rule-based norms. Now, for those 100 million users of TikTok, they will be able to continue to use the app without the updates.

But the full scale ban of this app does not take effect until November 12th. And it's important to note that timeline. Because the Commerce Department is saying that marks 90 days from the point where CFIUS, the Committee on Foreign Investment into the US, ruled on this order, calling for a divestment of the US operations of TikTok. Now skeptics are going to look at this date and say, by the way, that's also after the presidential election. So there may be some politics at play.

All of this, of course, comes as we've seen that back and forth over the last several days between Oracle, Walmart, as well as ByteDance. The latest report suggesting that Oracle would, as the structure stands right now, take a 20% minority stake in the company but still have significant oversay or control over the security measures in place for US operations.

The president has come out and said that he's not prepared to sign off on that yet, although there are several reports that suggest we may be getting a ruling or his decision on that issue any day now. We did get a statement from TikTok which reads, in part, in our proposal to the US administration, we've already committed to unprecedented levels of additional transparency and accountability, well beyond what other apps are willing to do.

TikTok going on to say, we will continue to challenge the unjust executive order which was enacted without due process and threatens to deprive the American people and small businesses across the US of a significant platform for both a voice and livelihood. So some clarity on that September 20th deadline, we know what will be banned come September 20th, come Sunday.

But that doesn't mean the door is shut yet on that deal. So we could certainly be getting additional headlines on that front today.

DAN ROBERTS: Akiko, Dan here. You mentioned, of course, that there may be some politics involved. I think it sure looks like it's all politics for everyone involved, Oracle, TikTok, Trump. And let's see what would actually satisfy what Trump initially said. It seems to me that anything other than an outright majority sale doesn't really jive with his initial demand.

But let's make sure we mention, Vanessa Pappas, the interim CEO at TikTok, she responded to Instagram exec Adam Mosseri's tweet. And I think a little bit kind of challenged them and we'll see, maybe called their bluff. Because, of course, that Instagram exec has been saying that, even though TikTok is a competitor to Instagram, TikTok being shut down would be bad for Instagram, bad for the whole internet.

She responded today and said, we agree this type of ban would be bad for the industry. And we invite Facebook and Instagram to publicly join our challenge and support our litigation. It's so interesting to me, the reason I say call their bluff, I don't necessarily see Facebook and Instagram doing that and rushing in to help out what really is a competitor in the social video space.

But I just wonder your take on that. And I wonder what you think is going to happen here. Because another suggestion about all the politics that some have made is that maybe you'll see TikTok sort of suddenly make it clear to its users, all of whom are young people, that, hey, this situation will change with a Biden presidency.

AKIKO FUJITA: Yeah, I mean, so let's talk about the politics element first. Because, to your point, when you look back to that executive order that was signed back in August, the president made it very clear this would be a complete ban on the app, unless there were measures taken by this company, the parent company ByteDance.

And then we had that ruling from CFIUS that called for nothing short of a divestiture of the US operations of TikTok. If you look at the headlines over the last several days in terms of how this deal between Oracle and ByteDance would be structured, it would address none of that. Because Oracle would have a minority stake in it. And the president has gotten some significant pushback on that front, not just internally from the China hawks, the likes of Secretary of State Mike Pompeo, but also from Republican and Democratic senators.

You saw Marco Rubio, as well as Josh Hawley coming out with these statements saying, wait a second, this doesn't address the data collection concerns, as well as what the president called our national security concerns that you initially addressed and that triggered this investigation into the company.

So the president, at least today, even though the order came down from the Commerce Department can say, look, I'm holding my ground here. I am not going to budge on that issue. What happens with the deal is still big question mark. As it relates to Facebook and Instagram, I think you're right. There's a lot of skeptics who will say, despite Adam Mosseri's there, probably unlikely that Facebook will join this.

You know, I've spoken to a number of former Facebook employees who have been looking at this saying, this shows the incoherence of US policy. On the one hand, you've got lawmakers who are looking at these big tech companies saying, you have [INAUDIBLE] silence competition out there because of anti-competitive behavior.

TikTok is one of those companies that Facebook can point to to say, look, there's plenty of competition out there. If Facebook stays silent on this issue, that seems to, to your point, call Facebook's bluff to say, look this is going to be a huge benefit for Facebook if TikTok is completely banned come November. So that is an interesting dynamic to watch on this side as well.