Ugh, #tiktok is back in the news and the reporting is confused and confusing. Time for a little interpreting of the recent reporting that the TikTok forced sale is "on hold": https://www.wsj.com/articles/tiktok-sale-to-oracle-walmart-is-shelved-as-biden-reviews-security-11612958401

First things first, I am not currently a government employee nor do I have access to any inside information about what is going on with respect to government negotiations with #tiktok. My commentary here is based on an understanding of how the CFIUS process works generally +

an understanding of the TikTok deal itself, though everything I will tweet here about the deal is publicly available/reported. It's a federal crime to reveal any information about a CFIUS transaction unless it was subject to a CFIUS EO (which TikTok was)

1) Yes, TikTok has been successful in legal challenges to the executive order issuing an app BAN, based on IEEPA authorities. this is because TikTok has successfully argued that a ban of the app is a violation of free speech. BUT

2) TikTok has NOT been successful (at least so far) with legal challenges to the EO order forcing divestment through CFIUS authorities. I do not anticipate that TikTok will be successful with such challenges because CFIUS decisions are not subject to judicial review

3) Banning an app is very different from limiting who can own it or placing specific undertakings on owners to ensure operations and governance structures mitigate national security concerns. Current reporting conflates the IEEPA EO and CFIUS EO in unhelpful ways

4) There are reports that the TikTok sale is on hold. Psaki says that it is inaccurate to say that the Biden admin has reversed the Trump admin's CFIUS order

5) I'm not going to pretend that I know the status of negotiations. It does seem to be the case that the sale/arrangement with Oracle has not be executed because it has not be reported. But, I don't know the status of TikTok/gov't talks and anyone that does can't talk about it

6) BUT, it is clear from publicly available documents that the USG has determined that ByteDance's ownership of TikTok is a natsec threat, especially through sensitive personal data channels because of the ways in which the PRC can exert influence over ByteDance

7) I don't see the Biden admin changing that assessment. If this is a natsec threat, then something will have to be done to address it. It could still be a forced sale, but it may be through a mitigation agreement. I am unaware of precedent for reversing a divestiture order . . .

8) I'm sure government lawyers are better able to assess how to do this legally if indeed the USG decides it is better able to address the underlying risks through mitigation than divestiture (esp. since PRC placed export controls that complicate a sale)

9) But, this doesn't mean that ByteDance won or that the Biden Admin is fundamentally reversing the Trump Admin's decision. Effectively dealing with the natsec concerns that arise from PRC influence over firms with access to lots of US user data is messy

10) The policy process around how to react to and mitigate these risks is not straight forward. What is different about TikTok is that the Trump Admin went public with the process before it was complete; this is not supposed to happen per CFIUS statute.

11) Finally, I continue to maintain that the Trump admin's approach to the TikTok case made it harder to get to a positive outcome, and that the USG's interests would likely have been better served if the initial negotiations didn't become so public

12) Complicating a CFIUS review with a IEEPA ban made everything harder and less legally certain, which likely emboldened ByteDance to push back. Lesson - don't push through clearly unconstitutional EOs and keep the negotiations behind closed doors.