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There is a new sign that the Chinese government is leaning toward pushing the deal to transfer control of TikTok from ByteDance to US owners, including Oracle and Walmart.
An editorial on Wednesday in China Daily, the Beijing regime’s state newspaper, called the deal to form TikTok Global, which was forced by an executive order from President Trump under the guise of protecting the national security of the United States, was “dirty and unfair and based on harassment and extortion. “
“China has no reason to green light such an agreement, which is dirty and unfair and is based on harassment and extortion,” says the China Daily editorial. “If the United States has its way, it will continue to do the same with other foreign companies. Giving in to the irrational demands of the United States would mean the ruin of the Chinese company ByteDance. “
The Trump administration has given ByteDance a November 12 deadline to sell TikTok’s US operations to majority US ownership; otherwise, the US government will proceed with a total ban on TikTok.
Investors in ByteDance, Oracle, Walmart and ByteDance believed they had struck a deal for TikTok Global, which reportedly valued the apps company at up to $ 60 billion, that would satisfy both the US and Chinese governments. The new US-based TikTok Global “would pay more than $ 5 billion in new tax dollars to the US Treasury,” according to a joint statement from Oracle-Walmart. Oracle would monitor the security and user data of the company and the application would run on its cloud infrastructure.
That deal received a “blessing” from Trump last week. But there is a chance that the deal won’t go through.
ByteDance and Oracle are spinning different narratives on TikTok Global’s ownership terms. And on Sunday, ByteDance said it would own 80% of TikTok Global, with Oracle and Walmart collectively taking a 20% stake. But Oracle said Monday that “ByteDance will have no ownership in TikTok Global” when it is created and that the Americans would have majority ownership.
Trump, on Fox News’ “Fox & Friends” on Monday, suggested he would scrap the deal “if we find that [Oracle doesn’t] have full control. “Trump said ByteDance” would have nothing to do with [TikTok], and if they do, we just won’t make the deal. “
In its editorial, China Daily compared Trump’s forcing ByteDance to divest US operations with the tactics of the mafia. “What the United States has done to TikTok is almost the same as a gangster forcing an unreasonable and unfair business deal on a legitimate company,” reads the newspaper’s editorial, titled “Not disguising TikTok’s proposed deal is a dirty trick and dishonest”.
TikTok Global will have four U.S. citizens on its five-member board of directors, according to a joint statement from Oracle and Walmart. The New York Times reported that ByteDance’s Zhang will be the only non-US board member, along with Walmart CEO Doug McMillon, General Atlantic’s William Ford, Susquehanna’s Arthur Dantchik and Sequoia’s Douglas Leone.
On Wednesday, Maria Bartiromo of Fox Business reported that Oracle CEO Larry Ellison, a Trump supporter, told her that, along with the four American members of the TikTok Global board, the fifth “will likely be Japanese, Masa Son. “who is the CEO of SoftBank (who is an investor in ByteDance).
TikTok says it has 100 million US users of the app, which is popular with teens and young adults for sharing lip syncs, dancing, and other short-form videos.
“The success that TikTok has achieved … has apparently made Washington uncomfortable, and has used national security as a pretext to ban the short video sharing app,” China Daily said in the editorial. “National security has become Washington’s weapon of choice when it comes to curbing the growth of companies from foreign countries that are outpacing their American peers.”
ByteDance will continue to maintain control over the artificial intelligence algorithms that drive the video recommendations of the TikTok application (and that ByteDance uses for the similar Douyin application, available in China).
China Daily said that, with Oracle given the authority to verify the source code of the TikTok app, that would also provide unfair information to the US about ByteDance’s Douyin. Therefore, ByteDance runs the risk of losing not only control of the company, but also its core technology that it has created and owns. That would be detrimental to the long-term development of the company, ”says the newspaper’s editorial.
Over the weekend, TikTok got a one-week postponement of the Commerce Department’s ban on social video app downloads until Sunday, September 27, citing President Trump’s provisional approval of the ByteDance deal.
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