As the App World Turns: Halt on Implementation of Commerce Prohibitions Regarding TikTok and WeChat

Wilson Sonsini Goodrich & Rosati

This past weekend saw a halt to the anticipated September 20 implementation of broad prohibitions published on September 18 by the U.S. Department of Commerce (Commerce) regarding TikTok and WeChat mobile applications. No restrictions regarding these applications have yet been implemented; the situation is fluid with respect to both mobile applications, making it uncertain when and if any restrictions will be implemented.

On September 19, Commerce announced a delay on the prohibition of identified transactions related to ByteDance, Ltd. and its subsidiaries, including TikTok Inc. Commerce has delayed the prohibition, which would have effectively blocked new downloads of and updates to the TikTok application starting on September 20, until no earlier than September 28. This shift emerges from President Trump's apparent support of a deal regarding the involvement of Oracle and Walmart in TikTok—the details of which are not publicly known—that might mitigate national security concerns regarding TikTok and allow TikTok to maintain its U.S. operations. Whether and how the agreement is finalized likely will determine whether the previously announced Commerce prohibitions are implemented.

In parallel, on September 20, the U.S. District Court for the Northern District of California approved a preliminary injunction blocking the Commerce prohibitions regarding WeChat. The injunction arose from a lawsuit by Chinese-American and Chinese-speaking WeChat users in the United States; the court expressed concerns that the Commerce prohibitions might infringe on constitutionally protected speech and found that "there are no viable substitute platforms or apps for the Chinese-speaking and Chinese-American community." The nature of the injunction is temporary, so the previously announced Commerce prohibitions, or some modified version of them, could apply to WeChat in the future, depending on further developments in the lawsuit.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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