Oracle-TikTok Deal Gets OK From Trump

Yolanda Curtis
September 20, 2020

The deal, announced by the companies, also includes Walmart as a commercial partner and would create a new USA company named TikTok Global.

"I think it's going to be a fantastic deal", Trump said.

He said the app will hire at least 25 thousand people if the deal follows through.

United States users rushed to downed the popular app. TikTok downloads rose 12 percent to 247,000 in the country on Friday compared to the previous day, according to preliminary estimates from Sensor Tower, which tracks mobile apps.

Oracle said that all TikTok technology will be in possession of TikTok Global, which will "comply with USA laws and privacy regulations".

According to a source close to the matter, ByteDance would keep the rest of the shares.

Now, there is a new wrinkle in the battle over the future of the social app, which is widely used in Chinese-speaking communities and is owned by China-based Tencent.

The Commerce Department did not respond immediately to a request for comment. An unnamed official for the Committee on Foreign Investment in the United States (CFIUS) says, "ByteDance is still the biggest dog in this deal".

The administration is now reviewing a deal between Oracle and ByteDance that would make US-based Oracle the "trusted technology provider" in the states for TikTok, in a way that would address the concerns over user data.

The row over TikTok comes at a time of heightened tensions between the Trump administration and the Chinese government over a number of issues, including trade disputes, protests in Hong Kong and Beijing's handling of the coronavirus outbreak.

The company added that it would continue to challenge the "unjust executive order" which it argues was enacted without due process and threatens to "deprive the American people and small businesses across the United States of a significant platform for both a voice and livelihoods".

ByteDance was pressured into a deal for TikTok when Trump threatened to ban the app in the US over national security concerns.

The filing, published by CourtListener, reveals the judge considers the U.S. government "does not meaningfully contest through evidence" the effect of preventing WeChat business transactions on WeChat users in the United States, even when taking into account the "overarching national-security interest".

Commerce Secretary Wilbur Ross had said China used WeChat and TikTok "to threaten the national security, foreign policy, and the economy of the U.S.", when announcing the ban on Friday.

Nevertheless, the deal between TikTok, Walmart, and Oracle is final yet as the Chinese government's approval is required, so the fate of the company hasn't been set in stone yet.

Oracle will be in charge of hosting all US user data and the security of the associated computer systems, while Walmart will supply its online sales, order management and payment services.

Oracle and Walmart will be given the chance to take a total stake of up to 20 percent in TikTok prior to an initial public offering by the company, TikTok said.

The U.S. Commerce Department announced on Friday that it planned to ban WeChat from U.S. app stores and bar the app from accessing essential internet services in the U.S., citing "national security" concerns.

In its statement, TikTok said that it was committed to protecting the privacy and safety of its 100 million U.S. users.

Specific evidence about WeChat posing a national security threat was also "modest", according to Judge Beeler.

The TikTok Global deal does not include the app's China twin, Douyin, which has become an enormous hit in its own right.

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