President Trump said Saturday that he has given his "blessing" to a deal that will keep the popular social media app TikTok operating in the United States, but the decision appears perplexing to some observers.
Despite Trump's approval, the deal itself is not done — the current framework consists of U.S. tech company Oracle joining up with Walmart to form a new entity called TikTok Global, for which they'd pay TikTok's Chinese parent company, ByteDance, $12 billion. The two companies plan to own a combined 20 percent of TikTok Global, while ByteDance is expected to retain most of the remaining 80 percent. Per NPR, TikTok Global will still be presented as majority-American owned since 40 percent of ByteDance is owned by U.S. investors.
The negotiations to sell TikTok were spurred by Trump's threat to ban the app in the U.S. over national security concerns as tensions between Washington and Beijing remain high. It seems that the Trump administration is satisfied those concerns will be addressed in the Oracle deal, but Chris Kelly, the former chief privacy officer at Facebook, told NPR the Chinese government will likely still have "substantial" ability to pressure ByteDance under the future framework and the interactions "could stretch into personal data pretty easily," which has been Washington's primary worry.
On a similar note, Trump previously signed an executive order in August requiring ByteDance to completely divest from U.S. TikTok operations, which likely won't be the case under the proposed deal. "They're really moving the goalposts here," a former Committee on Foreign Investment in the United States official told NPR on condition of anonymity. "ByteDance is still the biggest dog in this deal. The foreign control issue does not go away." Read more at Bloomberg and NPR. Tim O'Donnell
TikTok's parent company and Oracle have agreed to a takeover deal that has the Treasury Department's approval, NBC News reports.
After suggesting the Chinese-owned video sharing app was a national security risk, President Trump ordered TikTok's owner ByteDance to find a buyer for its U.S. operations or risk a total ban. Microsoft's bid for TikTok didn't work out, but Oracle, ByteDance, and the Treasury Department all agreed to a deal for Oracle's U.S. takeover, two people familiar with the arrangement said.
After Oracle submitted its initial offer, Treasury Secretary Steven Mnuchin reportedly revised the deal's terms and sent it to ByteDance and Oracle on Wednesday night. The revisions had to do with the national security concerns surrounding TikTok's sale, people familiar with the deal tell Bloomberg. Both ByteDance and Oracle accepted the revisions. ByteDance would like to retain majority ownership of TikTok in a potential deal with Oracle, but Oracle will have to take operational control of the app to meet the U.S.'s requirements.
Microsoft had originally seemed to be the most likely buyer for TikTok. But ByteDance ended up rejecting its offer, while Oracle — whose CEO held a fundraiser for Trump earlier this year — ended up on top. Kathryn Krawczyk