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TikTok deal ‘needs China’s approval’
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CHINA will need to approve ByteDance’s proposed deal with Oracle Corp for its TikTok app, the Chinese company said yesterday, indicating how its bid to stave off a ban in the United States could be further complicated.
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.
An outright sale of TikTok’s operations or technologies was not included in ByteDance’s proposal to the United States, Chinese state media reported yesterday citing a separate statement from the company.
Oracle has announced it was part of a proposal submitted by ByteDance to the US Treasury Department to serve as “trusted technology provider,” as ByteDance hopes to head off a Trump order that it divest TikTok’s US operations.
The Oracle arrangement, according to a person familiar with the matter who isn’t authorized to speak publicly, entrusts TikTok’s US user data to Oracle, which would oversee technical operations for TikTok in the US. Oracle won’t develop code for the app, but will review it and updates to it.
The Financial Times had earlier reported that ByteDance was to place TikTok’s global business in a new US-headquartered company with Oracle investing as a minority shareholder along with other US investors.
US President Donald Trump on Wednesday raised questions about ByteDance’s plans to keep a majority stake in TikTok’s US operations and said he did not favor the idea of the Chinese firm retaining control, after six Republican lawmakers urged him to reject the proposal.
Trump had previously threatened to ban the app as early as Sunday unless its US operations were sold to a US company. “Conceptually, I can tell you that I don’t like that,” Trump told a news conference when asked about a reported proposal to give Oracle only a minority share. “I’m not prepared to sign off on anything. They’re going to be reporting to me tomorrow morning and I’ll let you know.”
Senator Marco Rubio and five other Republican senators on Wednesday urged the administration to reject the deal as long as ties remained to Chinese owner ByteDance, and suggested the president could block the proposal.
US national security officials fear that ByteDance could provide American user data to the Chinese government, an accusation the company denied. But Trump may not want to alienate 100 million-odd American TikTok users so close to the November 3 elections.
Trump has also said he is a fan of Oracle’s co-founder and Chairman Larry Ellison, one of few tech executives to openly support him.
When asked about ByteDance’s comments regarding the need for China’s approval, Chinese foreign ministry urged the United States to respect the principles of the market economy and fair competition, and to stop politicizing normal economic and trade cooperation.
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