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Trump Says ByteDance Can’t Keep Control of TikTok in Oracle Deal


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President Donald Trump said he might rescind his tentative blessing for a deal between Oracle Corp. and ByteDance to create a new U.S.-based TikTok service, casting doubt on the agreement as Chinese state media signaled reluctance in Beijing.

 

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Speaking in an interview on Fox News on Monday, Trump said he wouldn’t approve the deal if the Chinese company retains control of TikTok. However, he also indicated that he expected Chinese influence to be diluted by a future public offering of the new company.

 

 

“They will have nothing to do with it, and if they do, we just won’t make the deal,” Trump said, referring to ByteDance, which owns TikTok. “It’s going to be controlled, totally controlled by Oracle, and I guess they’re going public and they’re buying out the rest of it -- they’re buying out a lot, and if we find that they don’t have total control then we’re not going to approve the deal.”

 

Shortly after Trump’s comments, Hu Xijin, editor-in-chief of the China state-affiliated Global Times, tweeted that Beijing would likely reject the deal “because the agreement would endanger China’s national security, interests and dignity.”

 

The Global Times is a tabloid run by the People’s Daily -- the flagship newspaper of the Communist Party. Hu’s tweets are closely watched after accurately forecasting previous moves by China’s government, though his statements at times don’t reflect official policy.

 

ByteDance was pressured into a deal for TikTok in August, when Trump threatened to ban the app in the U.S. over national security concerns about the service’s data gathering. After Microsoft Corp. made a proposal for a full buyout, ByteDance instead turned to Oracle’s offering, in which the Chinese parent will maintain a solid majority stake.

 

ByteDance may end up owning as much as 80% of TikTok Global, which would include the app’s operations in the U.S. and the rest of the world excluding China.

 

On Friday, Trump said that he had approved of the deal with Oracle and WalMart Inc. “in concept.”

 

Under the current proposal, there will be five seats on the board of TikTok Global. Walmart Chief Executive Officer Doug McMillon will become a director, the retailer said in a statement. TikTok Global will likely be headquartered in Texas and will hire “at least” 25,000 people, Trump said.

 

The valuation for TikTok has been a looming question in the wake of Washington and Beijing clashing over the negotiations. The company will seek a valuation of $60 billion, according to a person familiar with the matter.

 

TikTok Global intends to hold an initial public offering within 12 months, Oracle and Walmart said.

 

Oracle will get full access to review TikTok’s source code and updates to make sure there are no back doors used by the company’s Chinese parent to gather data or to spy on the video-sharing app’s 100 million American users, according to people familiar with the matter. The U.S. software giant has given reassurances it can protect TikTok user data from foreign influence.

 

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Trump administration challenges order that blocked WeChat app store ban

  • The Trump administration will challenge an order issued that blocked the Commerce Department’s ban on downloads of the Chinese-owned app WeChat. 
  • U.S. Magistrate Judge Laurel Beeler on Sunday halted the move that would have forced Apple and Google to remove Tencent Holding’s WeChat for downloads.

 

The Trump administration will challenge an order that blocked the Commerce Department’s ban on downloads of the Chinese-owned messaging app WeChat. 

 

U.S. Magistrate Judge Laurel Beeler on Sunday halted a move that would have forced Apple and Google to remove Tencent’s WeChat for downloads by Sunday evening. Users who had already downloaded the app would have found it largely unusable. 

 

“Prohibiting the identified transactions is necessary to protect the national security of the United States, and the department expects to soon seek relief from this order,” the Commerce Department said, according to Reuters.

 

“The Government’s view remains that Executive Order 13943 is fully consistent with law and promotes legitimate national security interests,” a Department of Justice spokesperson told CNBC, referring to the Commerce Department’s ban. “While the Government will comply with the injunction, we are considering appropriate next steps and intend to vigorously defend the Executive Order and the Secretary’s implementation efforts from legal challenges.”

 

The department previously said it anticipated a long legal battle over the ban.

 

The Trump administration on Friday sought to ban downloads of WeChat and ByteDance-owned TikTok from operating in the United States, starting Sunday, over alleged national security concerns. But a deal on Saturday between TikTok owner ByteDance and Oracle/Walmart allows the TikTok app operate as normal for now.

 

In the deal, Oracle will be TikTok’s secure cloud provider and will be a minority investor with a 12.5% stake. Walmart tentatively agreed to purchase a 7.5% stake in the short-form video social media app. TikTok’s Chinese parent company ByteDance will own the remaining 80% of TikTok Global.

 

There was new confusion over the terms of the deal on Monday morning, however, when President  Donald Trump suggested ByteDance won’t have any control over TikTok Global.

 

“They will have nothing to do with it, and if they do we just won’t make a deal,” Trump said Monday on “Fox & Friends.”

 

The White House has repeatedly warned against Beijing’s alleged intellectual property threat, which China has denied.

 

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