• Ssemujju Lewis E

ByteDance And Oracle Still In Disagreement

ByteDance and Oracle Corp issued conflicting statements on Monday over the terms of an agreement they reached with the White House over the weekend to allow TikTok to continue to operate in the United States, casting doubt on President Donald Trump’s preliminary blessing of the deal.

China’s ByteDance was racing to avoid a crackdown on its popular short-video app after the U.S. Commerce Department said on Friday it would block new downloads and updates to the app. U.S. officials had expressed concern that the personal data of as many as 100 million Americans that use the app was being passed on to China’s Communist Party government.

A successful deal would allow Trump to drop his threat of shutting down TikTok and avoid alienating its army of young users ahead of the Nov. 3 U.S. election.

ByteDance said on Monday that it will own 80% of TikTok Global, a newly created U.S. company that will own most of the app’s operations worldwide. ByteDance added that TikTok Global will become its subsidiary.

Oracle and Walmart Inc, which have agreed to take stakes in TikTok Global of 12.5% and 7.5% respectively, had said on Saturday that majority ownership of TikTok would be in American hands. On Monday, Oracle said ByteDance’s ownership of TikTok would be distributed to ByteDance’s investors, and that the Beijing-based firm would have no stake in TikTok Global.

Trump signed an executive order on Aug. 14 giving ByteDance 90 days to relinquish ownership of TikTok. Oracle’s account of the deal would mean that ByteDance would be complying with that order, while ByteDance’s account would represent a policy reversal for Trump.

Trump did not comment on the conflicting accounts of the agreement on Monday but said the deal was “working its way through” after he granted his preliminary approval.

“If we can save (TikTok), we will save it, and if we can’t we will cut it off. We have to have total security,” Trump told reporters before departing the White House.

The corporate governance arrangement that the companies have disclosed for TikTok Global does not award total control to Oracle and Walmart. Walmart Chief Executive Doug McMillon would be one of five directors on TikTok Global’s board, the companies have said. Others would include ByteDance founder Zhang Yiming, and the heads of ByteDance’s two top investors, General Atlantic and Sequoia Capital. The fifth board director has yet to be named.

The current plan for TikTok Global does not involve any transfer of algorithms or technologies, and Oracle will be able to inspect TikTok U.S.’s source code, ByteDance said on Monday. This is akin to U.S. companies such as Microsoft Corp sharing their source code with Chinese technology experts, ByteDance added. Oracle and Walmart have said all of TikTok’s technology will be transferred to TikTok Global.

The Commerce Department postponed a ban on downloads and apps to the TikTok app that was due to take effect on Sunday by one week, to give the company time to finalize the deal.

The Committee on Foreign Investment in the United States, a U.S. government panel that reviews deals for potential national security risks, has been overseeing the negotiations.

Some sources close to the deal have sought to reconcile the discrepancies by pointing out that 41% of ByteDance is owned by U.S. investors, so by counting this indirect ownership TikTok Global would be majority-owned by U.S. parties. One of the sources said the deal with Oracle and Walmart values TikTok Global at more than $50 billion.


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