Alert September 18, 2020

The U.S. Department Of Commerce Restricts Certain Activities Related To WeChat And Tiktok

To implement President Trump’s August 6, 2020 Executive Order on Addressing the Threat Posed by WeChat and Executive Order on Addressing the Threat Posed by TikTok, today the U.S. Department of Commerce announced prohibitions on certain business-to-business transactions related to the mobile applications WeChat and TikTok

For WeChat, the following table summarizes prohibited transactions, each with an effective date of September 20, 2020.

 

Affected Industry Segments Summary of Prohibited Transactions
App Distribution & Updates

(e.g., app store providers such as Apple and Google)

Any provision of services to distribute or maintain the WeChat mobile application, constituent code, or application updates through an online mobile application store or online marketplace where mobile users within the U.S. may download or update WeChat applications
Internet Hosting

(e.g., file hosting, domain name server hosting, cloud hosting, and VPN hosting)

Any provision of internet hosting services enabling the functioning or optimization of the WeChat mobile application within the U.S.

Content Delivery
(e.g., paid services enabling faster delivery of content)

Any provision of paid content delivery services enabling the functioning or optimization of the WeChat mobile application within the U.S.
Internet Transit and Peering

(e.g., network operators and ISPs provding connectivity, transport and routing for another network)

Any provision of directly contracted or arranged internet transit or peering services enabling the functioning or optimization of the WeChat mobile application within the U.S.

Funds Transfer and Payment Processing
(e.g., banking and payment providers)

Any provision of services through the WeChat Mobile application for the purpose of transferring funds or processing payments to or from parties within the U.S.
WeChat Integrations

(e.g., users of WeChat functionality in connection with other U.S. software or services)

Any utilization of the WeChat mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the U.S.

 

The prohibitions apply only to business-to-business transactions that support distribution and use of WeChat and TikTok within the United States and its territories, and they do not prevent U.S. companies from engaging in business transactions using the WeChat application outside of the United States—for instance, U.S. firms using WeChat’s embedded mini-app programs to facilitate transactions and engage consumers in China will not be affected. 

The prohibitions do not directly affect any individual’s use of the WeChat mobile applications within the United States but will likely impair their performance and user experiences.

Also, the prohibitions do not appear to immediately affect transactions with WeChat-owner, Tencent Holdings, or its other businesses.

For TikTok, the following table summarizes prohibited transactions, with the effective date indicated below.

Affected Industry Segments Summary of Prohibited Transactions  Effective Date
App Distribution & Updates

(e.g., app store providers such as Apple and Google)

Any provision of services to distribute or maintain the TikTok mobile application, constituent code, or application updates through an online mobile application store or online marketplace where mobile users within the U.S. may download or update TikTok applications

September 20, 2020

Internet Hosting

(e.g., file hosting, domain name server hosting, cloud hosting, and VPN hosting)

Any provision of internet hosting services enabling the functioning or optimization of the TikTok mobile application within the U.S.

November 12, 2020

Content Delivery

(e.g., paid services enabling faster delivery of content)

Any provision of paid content delivery services enabling the functioning or optimization of the TikTok mobile application within the U.S. November 12, 2020
Internet Transit and Peering

(e.g., network operators and ISPs provding connectivity, transport and routing for another network)

Any provision of directly contracted or arranged internet transit or peering services enabling the functioning or optimization of the TikTok mobile application within the U.S.

November 12, 2020

TikTok Integrations

(e.g., users of TikTok functionality in connection with other U.S. software or services)

Any utilization of the TikTok mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the U.S. November 12, 2020

 

The TikTok prohibitions do not restrict (1) the exchange between or among TikTok mobile application users of personal or business information using the application (however, users would be unable to update the application from within the U.S.); (2) U.S. persons or others from activities relating to mobile applications for distribution, installation, or use outside of the United States; or (3) storage of TikTok user data in the United States.

The TikTok prohibitions could still be reversed by President Trump if TikTok is able to reach an agreement with a U.S. counterparty that satisfies the U.S. government’s national security concerns prior to the November 12, 2020 effective date.