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Trump looks at Alibaba behind Tick Tock; Indications are that more Chinese apps will be banned

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The United States has taken aim at some of China’s biggest tech champions, from Huawei and ByteDance’s TikTok to Tencent’s WeChat. Alibaba, one of the world’s largest retail and internet conglomerates, could be next.

The actions against Chinese companies have marked a dramatic escalation of the Trump administration’s push back against Beijing’s rising tech prowess, forcing global players to chose between China and the United States.

“We are in a paradigm shift, and geopolitics is going through a historic transformation right now,” said Alex Capri, research fellow at the Hinrich Foundation and senior fellow and lecturer at the National University of Singapore. Washington officials are making “more accusations” against Chinese tech companies, an “indication that the administration is really looking to decouple” the tech industry, he added.

Unlike ByteDance or Huawei — whose global expansion was blunted after Washington cut it off from US technology — Alibaba (BABA) hasn’t had much success expanding into Western markets. But the fact that it is a national tech champion in China may be reason enough for Washington to target it, according to Capri.

Alibaba hasn’t yet been threatened with the same kinds of sanctions that US President Donald Trump has proposed or levied against other Chinese tech firms. And Trump has even spoken fondly of company founder Jack Ma, calling him a “friend of mine” earlier this year after the Chinese billionaire said he would donate supplies for fighting the coronavirus pandemic.

But the company is on the minds of US officials. Secretary of State Mike Pompeo name-checked Alibaba last week when he urged American companies to remove “untrusted” Chinese-owned technology from their digital networks.

Washington wants to protect “Americans’ most sensitive personal information and our businesses’ most valuable intellectual property — including Covid vaccine research — from being accessed on cloud-based systems run by companies” such as Alibaba and Tencent (TCEHY), among others, Pompeo said at the time.

Multinational companies are “being picked as national champions for strategic assets and are being leveraged … whether they like it or not,” Capri said.
Companies like Alibaba were “nurtured in a fully protected environment in China, that was closed to foreign competitors [and] they captured market share without having to compete with foreign companies,” Capri said. “Now that they’re venturing out and they want to compete in open markets, they’re facing a backlash.”

Alibaba, which did not respond to requests for comment for this story, operates widely popular e-commerce platforms, mostly available in China and other Southeast Asian markets. It also started Alipay, one of the most dominant payment apps in China alongside Tencent’s WeChat Pay.

Any action by Washington would likely not affect the company’s e-commerce and retail business in China, which accounts for nearly 80% of Alibaba’s 509.7 billion yuan ($73.5 billion) in annual revenue. International retail and wholesale revenue accounts for 7% of the company’s total haul. And even sanctions on Alibaba’s US cloud business would be minimal. Cloud services, which Alibaba does not break out by region, accounts for less than 10% of total revenue.
But the broadly worded executive order issued against WeChat last week indicates that Washington may be preparing to cast a wider net.

The WeChat order, for example, could prevent all US persons and US companies from working with anything related to the messaging app, according to Dan Wang, a Beijing-based technology analyst with research firm Gavekal Dragonomics. He said that could cut WeChat off from all US technologies — a move that would bar Tencent from the software and semiconductors it needs to keep WeChat operating.

“If they do something like that with Alibaba, that would also be a pretty big blow,” he said. Alibaba has very large cloud operations in China and “requires US semiconductors and software in order to continue these operations,” he said.

And even though Alibaba generates little revenue from the United States, the country is still an important market. Last year, the company opened up its e-commerce business to small US businesses and launched an English language version of its Tmall platform for the first time, seeking to double the number of foreign brands on Tmall to 40,000 in three years. A lot of big US companies already sell goods on Tmall, including Apple (AAPL), Nike (NKE) and Johnson & Johnson (JNJ).

Alibaba’s other ties to the United States also run deep. When the company chose to go public in 2014, it picked the New York Stock Exchange — an offering that raised a staggering $25 billion, setting a global record that was only bested last year when Saudi Aramco’s IPO raised $25.6 billion.

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Paytm has been removed from the Google Play Store

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Paytm is back hours after it was banned from Google Play for violating the platform’s rules for content. Paytm is now again listed on Google Play, the company tweeted. However, the Paytm First Games app has not been restored at the time of writing.

Earlier today, Paytm was removed from Google Play. The app was removed because of the addition of the fantasy cricket tournament that the company recently included, which violates Google Play policies, the search giant confirmed. The Paytm app for iOS is still available for download through Apple App Store. In addition to the Paytm app, Google Play has pulled the Paytm First Games app that also included the same fantasy cricket features with real money betting.

The Google Play listing of the Paytm app is showing an error that reads, “We’re sorry, the requested URL was not found on this server.” Users on Android devices are also not able to download the app from the preloaded Google Play. However, existing users who have the app already installed on their devices can continue to use the mobile wallet and other services provided by the company.

At the time Paytm posted a tweet to confirm that the app will be restored very shortly, and reassured users that their money is safe.

Alongside the Paytm app, Paytm First Games is also no longer available for download through Google Play.

Earlier on Friday, Google posted a blog post that highlighted its gambling policy that doesn’t allow app developers to facilitate sports betting. This was a feature that was provided by Paytm through the recently announced fantasy cricket tournament.

“We don’t allow online casinos or support any unregulated gambling apps that facilitate sports betting. This includes if an app leads consumers to an external website that allows them to participate in paid tournaments to win real money or cash prizes, it is a violation of our policies,” Google said in its blog post. It confirmed that this was the reason for removing the Paytm app.

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U.S. Bans TikTok, WeChat from App Stores Amid China Concerns

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Washington — The Trump administration said Friday it would bar the Chinese-owned mobile apps WeChat and TikTok from U.S. app stores as of midnight Sunday, a significant escalation in America’s tech fight with China that takes aim at two popular services used by more than 100 million people in the United States.

In a series of moves designed to render WeChat essentially useless within the United States, the government will also ban American companies from processing transactions for WeChat or hosting its internet traffic.

Similar restrictions will also go into effect for TikTok on Nov. 12 unless the company can assuage the administration’s concerns that the popular social media app poses a threat to U.S. national security. TikTok, which is owned by China’s ByteDance, is currently in talks with Oracle about a deal that could transfer some control to the American software maker. The Commerce Department said the prohibitions could be lifted if TikTok resolves the administration’s national security concerns by the November deadline.

The actions follow an Aug. 6 executive order in which President Trump argued that TikTok and WeChat collect data from American users that could be retrieved by the Chinese government. The administration has threatened fines of up to $1 million and up to 20 years in prison for violations of the order.

TikTok, which does not directly operate in China, has become a wildly popular platform for sharing viral videos in the United States. WeChat is at the center of digital life in China, functioning as a chat app, a payment platform and a news source. It is a vital source of connection for the global Chinese diaspora, but also a conduit for Chinese propaganda and surveillance.

Friday’s move is the latest tangible sign that the global internet, which once promised to break down political borders and connect the planet’s citizens, is fracturing, driven by nationalism and security fears.

People in China, the world’s most populous nation, can’t use the world’s most popular products, including Google, Facebook, YouTube and WhatsApp. Soon, Americans won’t be able to use WeChat. And even TikTok, perhaps China’s most successful digital export, is now under threat in the United States and has already been banned in India.

TikTok spokesman Josh Gartner said in a statement that the company was disappointed in the Commerce Department’s decision.

“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 U.S. of a significant platform for both a voice and livelihoods,” he said.

Tencent Holdings, which owns WeChat, called the rules “unfortunate” and said it would “continue to discuss with the government and other stakeholders in the U.S. ways to achieve a long-term solution.”

Oracle did not respond to a request for comment.

While the government is ordering a ban on the apps, it will largely be up to Apple and Google — which make the software that backs nearly all the world’s smartphones — to remove the apps from their stores. The two companies could face civil or criminal penalties for failing to comply with the new rules.

Apple and Google did not respond to requests for comment. Both have said in the past that they comply with the local laws in each country they serve.

Commerce Secretary Wilbur Ross, in an interview on Fox Business Network on Friday morning, said that the ban would initially have a much greater impact on WeChat.

“For all practical purposes it will be shut down in the U.S., but only in the U.S., as of midnight Monday,” Mr. Ross said.

TikTok would also face some changes, but would still be allowed to function until Nov. 12, Mr. Ross said, at which point it would face a ban if there was no deal that satisfied the administration’s concerns.

“As to TikTok, the only real change as of Sunday night will be users won’t have access to improved updated apps, upgraded apps or maintenance,” he said.

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