Donald Trump has signed off on an 11th hour deal allowing Oracle and Walmart to purchase a stake in TikTok, allowing the popular video sharing platform to avoid a ban in the U.S. previously set for Sunday.
As part of the deal, the U.S. software company Oracle is partnering with Walmart to form a new entity called TikTok Global, which will be headquartered in the United States. Oracle will host all of TikTok’s U.S. user data and will safeguard TikTok’s computer systems “to ensure U.S. national security requirements are fully satisfied,” TikTok said in a statement (via NPR).
However, the deal fall short of previous demands made by the Trump Administration. The Chinese-owned ByteDance will maintain an 80% stake in TikTok as well as control over its algorithm. Additionally, ByteDance has disputed Trump’s claims that it will be establishing a $5 billion education fund in the US, according to CNBC.
TikTok is estimated to have upwards of 100 million active users in the U.S. and consistently ranks as among the most downloaded apps on Apple’s App Store. However, U.S. government officials have expressed concerns over the amount of data collected by TikTok compared to other prominent social media platforms, especially given that TikTok is owned by a Chinese company. In late 2019, the U.S. military banned its personnel from using the app on government-issued devices.
Trump initially issued an executive order in late July threatening to ban TikTok unless the platform was sold to a company in the U.S. Along with Oracle and Walmart, Microsoft expressed interest in purchasing the platform, but was informed last week that their offer would not be accepted.
As both U.S. and China still must formally sign off on the acquisition, there’s still a chance for the Oracle-Walmart deal to go sideways, especially after Trump reads headlines like the one in Slate this morning: “The TikTok Deal Stinks”. However, for now, the Trump Administration will forgo a previous threat to block new downloads of TikTok from U.S. app stores starting Sunday.
— TikTok (@tiktok_us) September 19, 2020