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11/13/2020

TikTok can continue U.S. operations – for now

Dan Berthiaume
Senior Editor, Technology
Dan Berthiaume profile picture

The Commerce Department is abiding by a court order temporarily prohibiting the shutdown of the TikTok social media platform in the U.S.

In an official memorandum, the Commerce Department states it will abide by a preliminary federal court injunction against it taking action to cease TikTok’s U.S. operations. Citing concerns over TikTok’s parent company ByteDance having connections to the Chinese Communist Party, the Trump administration had ordered the short-form video platform to be banned in the U.S. if an American company did not reach a deal to take over its U.S. business by Thursday, Nov. 12.

However, a federal district court issued the temporary injunction protecting TikTok’s right to operate in the U.S. on Friday, Oct. 30. The injunction is not a permanent court order, and the Commerce Department’s statement notes it will not enforce federal actions against TikTok “pending further legal developments.”

In September, Oracle and Walmart received tentative U.S. approval for a joint 20% acquisition of a new business that would be called TikTok Global. Under this proposed merger, which still needs formal approval from both the U.S. and Chinese governments, TikTok Global would provide all TikTok services to users in the U.S. and most of the rest of the world, including Canada. In addition, Walmart would enter into commercial agreements to provide e-commerce, fulfillment, payments, measurement-as-a-service advertising, and other omnichannel services to TikTok Global.

Even with the uncertain status of TikTok’s longterm operation in North America and its possible e-commerce partnership with Walmart, Canada-based Shopify recently began enabling retailers on its platform to create and connect their TikTok For Business accounts and deploy in-feed shoppable video ads directly within its site.