Beijing Unlikely To Sanction Oracle TikTok Deal – Report

The protracted sale of ByteDance’s TikTok operation took another twist on Tuesday after it was reported that China was unlikely to approve the deal.

The US Commerce Department this week delayed a decision on banning TikTok in the US by a week, after US President Donald Trump said he approves of TikTok partnership with Oracle and WalMart ‘in concept’.

That came after earlier concerns that the White House would find it difficult to approve the deal that saw Oracle becoming TikTok’s “trusted technology partner”.

Protracted deal

The deal apparently sees Beijing-based ByteDance retain a majority 80 percent stake in TikTok and create headquarters for TikTok in the United States.

The White House had said last week it was reviewing the TikTok’s ‘technology partner’ deal with Oracle and Walmart.

It came after US President Donald Trump on 6 August signed an executive order that will prohibit US companies from carrying out TikTok-related deals with ByteDance after 45 days (on 20 September) on national security grounds

A number of US firms were in the running to acquire TikTok’s operations, but after rejecting Microsoft’s approach,ByteDance revealed its partnership deal with Oracle and Walmart.

China approval

But despite the approval of the deal by President Trump, it seems that the Chinese government is unlikely to sanction the deal that would see Oracle and Walmart purchase minority stakes in the US-owned company, TikTok Global.

This new company will reportedly have a board of directors comprised mainly of Americans, but ByteDance will retain a 80 percent stake in its US subsidiary TikTok Global, Reuters reported.

The news service also cited that China was unlikely to approve the “unfair” deal with Oracle and Walmart, pointing to an editorial in the state-backed Global Times newspaper.

“It is clear that these articles (terms) extensively show Washington’s bullying style and hooligan logic. They hurt China’s national security, interests and dignity,” the newspaper reportedly said in an editorial in its English edition published late on Monday.

“From the information provided by the US, the deal was unfair. It caters to the unreasonable demands of Washington. It’s hard for us to believe that Beijing will approve such an agreement,” it said, echoing comments on Twitter the same evening from its editor-in-chief, Hu Xijin.

The Global Times is a tabloid published by the People’s Daily, the official newspaper of China’s ruling Communist Party.

Government opposition

Reuters reported this month, citing sources, that Beijing was opposed to a forced sale of TikTok’s US operations by ByteDance, and would prefer to see the short video app shut down in the United States.

It is reported that the deal requires approval from regulators in both Beijing and Washington, ByteDance has said.

And it should be remembered that China’s Ministry of Commerce last month revised a tech export control list that experts said would give it regulatory oversight over any TikTok deal.

It is also reported that the deal would see TikTok’s source code being handed over to Oracle.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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