The Trump administration views TikTok’s Chinese ownership as a national security threat. Under an executive order issued on August 6, U.S. app stores are set to be barred from offering the app while a deal with Oracle and Walmart remains unsettled.
The ongoing saga started in early August when Microsoft confirmed it was in talks to buy the U.S. operations of TikTok, which is owned by the Chinese company ByteDance. Soon after, Walmart announced it planned to team with Microsoft on the deal. By mid-August, Oracle also put in a bid for the social media app.
ByteDance rejected Microsoft’s bid, and talks continued with Oracle and Walmart. Although the final terms have not been made public, a new U.S.-based company called TikTok Global is to be formed. Oracle will have a 12.5% holding, Walmart 7.5%, and ByteDance 80%. The board will reportedly consist of ByteDance founder Zhang Yiming and four U.S. citizens.
Some confusion arises from the statements made about TikTok Global. ByteDance says it will be a subsidiary whereas Oracle maintains that ByteDance won’t have ownership.
Things got more complicated when Trump said he would not approve a deal if ByteDance kept control. Tensions continue between China and the U.S. as U.S. officials express concern that the personal data of American users could be handed to the Chinese government.
Meanwhile, ByteDance is waiting for an export license from China, since the government there updated its export restrictions in August. CNBC has reported that China added “recommendation of personalized information services based on data analysis” to its restricted technologies.
The ban on TikTok was to take effect on September 20 but was delayed by a week, which the Commerce Department attributed to “positive developments.”
It remains to be seen how the U.S. government will respond to an order issued Thursday by federal Judge Carl Nichols on TikTok’s request to block the ban. The government has until late Friday to delay the ban or file its response.
So far, the Chinese government has not formally responded, but a state-backed newspaper called it a “dirty and unfair” deal. TikTok has argued that the restrictions are driven by politics ahead of the U.S. election rather than national security.
