TikTok, a popular video-sharing service operated by Chinese company ByteDance, has avoided a ban in the United States following US President Donald Trump's approval of a deal between TikTok and its two US partners
MOSCOW (Pakistan Point News / Sputnik - 21st September, 2020) TikTok, a popular video-sharing service operated by Chinese company ByteDance, has avoided a ban in the United States following US President Donald Trump's approval of a deal between TikTok and its two US partners.
A day before TikTok's app was slated to be removed from mobile app stores in the United States, Trump said he had approved a deal that allowed Oracle and Walmart to take a 20 percent stake in the company's US subsidiary.
"I have given the deal my blessing. If they get it done, that's great. If they don't, that's fine too. I approved the deal in concept," Trump told reporters on the White House's South Lawn on Saturday before departing for North Carolina.
Vanessa Pappas, Interim Head of TikTok, issued a statement on Sunday explaining the details of the deal.
"Both Oracle and Walmart will take part in a TikTok Global pre-IPO financing round in which they can take up to a 20% cumulative stake in the company. We will also maintain and expand the US as TikTok Global's headquarters while bringing 25,000 jobs across the country," the statement said.
Oracle CEO Safra Catz explained the company's role in TikTok's future operations in the United States.
"As a part of this agreement, TikTok will run on the Oracle Cloud and Oracle will become a minority investor in TikTok Global. Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud. We are a hundred percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok's American users, and users throughout the world. This greatly improved security and guaranteed privacy will enable the continued rapid growth of the TikTok user community to benefit all stakeholders," Catz said in a statement.
The US Department of Commerce released a statement on Friday that would prohibit transactions in the United States related to both TikTok and WeChat, an instant messaging service operated by Chinese tech giant Tencent, over national security concerns.
Under the proposed ban, the mobile apps of both TikTok and WeChat would be removed from mobile app stores in the United States. US internet hosting services and content delivery networks would also be prohibited from offering services to either TikTok or WeChat.
The proposed ban on both TikTok and WeChat was expected to take effect on Sunday.
Following Trump's approval of the TikTok deal, the US Department of Commerce said in a separate statement that it would delay the ban on TikTok until Sep 27.
TikTok's fate in the United States faced uncertainty after Trump issued an executive order in early August, when he gave the Chinese company 45 days to address US national security concerns and vowed to ban the company's services if TikTok failed to comply.
In late August, China updated its export restrictions that would prohibit TikTok from transferring its algorithm to foreign entities.
Following Trump's approval of the deal, ByteDance, TikTok's parent company, said in a statement stressing that the deal did not involve any transfer of its algorithm or technology and Oracle only had the power to check its source code for security purposes.
TikTok must seek approval from Chinese authorities in Beijing before it can complete the deal with Oracle and Walmart.
