Chinese company ByteDance’s TikTok has managed to avoid being kicked out of the US, thanks to a deal that received the approval of US President Donald Trump.
As reported by Reuters, Trump said that the deal will see TikTok being owned by new company TikTok Global and be headquartered in the US. The specific location may be somewhere in Texas. In addition, US companies Oracle and Walmart will have a 12.5% and 7.5% stake in TikTok Global respectively, according to the companies involved.
Oracle will also store US user data on its own cloud, and, according to CNBC, will have the authority to check on TikTok’s source code. However, ByteDance will not have to transfer any algorithms and technology over to Oracle.
Reuters noted that while Oracle and Walmart said that US investors will be the majority owners of TikTok Global, a source said that ByteDance will own 80% of the company.
Furthermore, Bloomberg reported ByteDance as saying that Oracle’s access to its source code was limited, and that Trump’s claims that they will pay a fee of $5 billion to the US government was inaccurate. “As for the so-called $5 billion tax to the U.S. Treasury, that refers to an estimate of the corporate income tax and other taxes TikTok will have to pay in coming years as part of its business development,” ByteDance was reported as saying in a blog post. “TikTok is confident in its future but the actual tax amount will have to be determined in accordance with the actual state of the business and American tax structures.”
The deal is the result of a 6 August executive order which sought to prevent transactions between US parties and ByteDance in the name of national security. As the Guardian put it, it would “effectively require TikTok and WeChat to shut down in the US or find new owners within 45 days.” Microsoft had been involved in talks to acquire TikTok, but announced on 13 September that ByteDance would not be selling the app’s US operations to them. #tiktok #bytedance