TikTok deal could still be pulled and app ban reinstated if Chinese owner retains any control, Trump says
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Your support makes all the difference.The deal to sell TikTok to Oracle and Walmart, and avert a ban, could still be pulled if Chinese owner Bytedance retains any control of the app, Donald Trump has said.
The president has given his support to a deal that would sell a part of TikTok to the US companies and allow the app to continue to operate in the US, amid threats that it could be banned. That was despite the fact that the TikTok deal did not seem to satisfy previous orders that China’s Bytedance should not have any ownership of the app.
But now Mr Trump has said that his administration would not approve the deal if buyers Oracle and Walmart did not get "total control" over the app.
"If we find that they don't have total control, then we're not going to approve the deal... We will be watching it very closely," he told Fox News in an interview.
Mr Trump’s indication on Saturday that he supported the deal, in principle, helped delay the threat of a complete ban of TikTok in the US. An executive order had imposed a deadline of Sunday and allowed for the app to be blocked if control of the company had not been handed over.
Under the terms of the deal, TikTok will be owned by a new company called TikTok Global and headquartered in the United States, possibly in Texas, Mr Trump said. Oracle will own 12.5 per cent of the new company and Walmart will take 8.5 per cent of it.
Bytedance, the current Chinese owner of TikTok, will keep 80 per cent of TikTok Global. Reports over the weekend said that because Bytedance is 40 per cent owned by US investors, the White House would consider that deal’s structure to satisfy the requirement that control of TikTok is handed over, reports over the weekend indicated.
Numerous commentators noted that appeared to be a compromise in the part of the White House, which had initially pushed for an outright sale, and it was unclear why the Trump administration had changed its view.
Part of that appeared to be a series of pledges that included the creation of 25,000 new US jobs at TikTok, and the creation of a $5 billion education fund in the country.
While ByteDance will get to keep TikTok's source code under the deal, Oracle will get to inspect it. Oracle Chief Executive Safra Catz said her company was "100% confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok's American users, and users throughout the world."
Catz served on Trump's transition team in 2016, while Oracle's co-founder and chairman, Larry Ellison, is one of the few top technology executives to openly support the U.S. president.
ByteDance also had to give up some of its control of TikTok. Reuters reported on Thursday that TikTok Global would have a majority of American directors, a U.S. chief executive and a security expert on the board. Walmart said on Saturday its CEO, Doug McMillon, would serve as one of the five board members of TikTok Global.
It is possible that ByteDance's ownership of TikTok will be reduced further next year. Reuters was first to report on Thursday that ByteDance is planning an initial public offering of TikTok Global. The filing of the IPO would be on a U.S. stock exchange and could come in about a year.
Additional reporting by agencies
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