President Trump gave approval Saturday for a deal in which China's ByteDance would partner with Oracle and Walmart to create a U.S. TikTok spinoff that would satisfy his security demands. ByteDance said Monday it wanted to clarify some "groundless rumors" about the deal, asserting that the Beijing company would control 80 percent of a wholly owned subsidiary, TikTok Global, after a public offering. Oracle would own a 12.5 percent stake and Walmart the other 7.5 percent.
U.S. backers of the deal argue that because U.S. investors own 41 percent of ByteDance, the 20 percent owned by Walmart and Oracle would give U.S. investors and companies a majority stake in the TikTok Global. Oracle and Walmart also said Americans would hold four of the five seats on the board of directors. ByteDance said Monday that one seat would go to Walmart CEO Doug McMillon but the other four would stay with current directors, including ByteDance founder Zhang Yiming.
Another "rumor" ByteDance sought to shoot down was Trump's assertion that the Chinese company would pay the U.S. $5 billion to create an education fund to teach American children "the real history of our country." ByteDance said the $5 billion figure was just an estimate of federal taxes it would pay over several years if its new subsidiary proved successful. Trump has said he wanted the buyers to pay the White House "key money" for facilitating the deal, but White House lawyers said that would violate the law.
ByteDance also said it will retain full control of TikTok's prized algorithms and source code, and Oracle can review the code for security threats but only in controlled locations. Trump's Aughst executive order giving ByteDance 90 days to sell to a U.S. company cited concerns that the personal data of Americans could be passed on to China's government. A senior Trump campaign official tells The Wall Street Journal that TikTok's Washington lobbyists had argued to Trump's campaign that banning a social media juggernaut with 100 million users, "including many who are of voting age and live in battleground states such as Florida," would be bad politics.