ByteDance Majority Stake Puts Oracle-TikTok Deal At Risk – Report

The White House may reportedly find it difficult to approve the deal that sees Oracle becoming TikTok’s “trusted technology partner”, in an effort to avoid a closure threat in the United States.

ByteDance this week had submitted a proposal to the US Treasury Department which it believed would resolve the administration’s security concerns.

It is reported the Oracle partnership deal would see ByteDance retain a majority stake in TikTok and create headquarters for TikTok in the United States.

Deal review

The White House this week said it was reviewing the TikTok’s ‘technology partner’ deal with Oracle.

But the fact that the Chinese owner retains a majority stake does not sit well with US President Donald Trump and other US officials, who in early August signed an executive order against TikTok (and WeChat owner Tencent).

The order was because the US believes they pose a national security risk because the app collects data on users, which “threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information.”

President Trump had set a deadline of 20 September for ByteDance to divest itself of TikTok’s US operations.

After it was revealed that Microsoft, which had been in the running to purchase TikTok’s US arm along with Walmart, had not reached a deal with ByteDance, the Chinese firm revealed its partnership deal with Oracle a day later.

White House

But Reuters has reported that ByteDance will face an uphill struggle to convince the White House to allow it to keep majority ownership.

It cited former national security officials and regulatory lawyers as its source.

And President Trump has already clear his concern at ByteDance’s plan.

“Conceptually I can tell you I don’t like that (ByteDance keeping a majority ownership of TikTok). That has been reported, but it has not been told to me yet. If that is the case, I’m not going to be happy with that,” President Trump also told reporters at the White House on Wednesday.

He added that would be briefed on the deal and consider it on Thursday.

Chinese approval

Meanwhile Reuters also reported ByteDance as warning on Thursday that China will also have to approve its proposed US TikTok deal.

An outright sale of TikTok’s operations or technologies was not included in ByteDance’s proposal to the United States, Chinese state media reported on Thursday citing a separate statement from the company.

ByteDance declined to comment when asked about this by Reuters.

China late last month updated its export control rules to give it a say over the transfer of technology such as TikTok’s user recommendation algorithm to foreign buyers.

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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