UPDATE: Tik Tok Ban Delayed One More Week
In my last blog post, I said I thought the Trump admnistration's announcement that new downloads for Tik Tok would be banned in the U.S, starting on Sunday was a strategy in order to hasten the deal with U.S. tech giant Oracle.
I was right.
The U.S. president said Saturday he has approved a deal between TikTok's China parent company, ByteDance, and Oracle, temporarily averting a ban beginning Sunday on TikTok in US app stores.
As a direct result, the Commerce Department confirmed in a statement Saturday evening that it would delay — by one week — restrictions that were originally to take effect on Sunday.
ByteDance will continue to be majority owner of TikTok - up to 80% of the company - under the agreement Trump said he approved, according to a person familiar with the matter.
What Does This Really Mean?
Not much. Yet.
There is still no deal. It's all just a delay tactic.
And even if a deal is made , unless things radicaly change Oracle will only own 20% equity in Tik Tok, while the Chinese parent company ByteDance will maintain 80% ownership.
Now also include Wal-Mart in the deal!
TikTok confirmed in a statement that IF a deal is made, Oracle and Walmart will TOGETHER hold up to that 20% share, with Oracle equity position being just 12.5% and Wal-Mart holding 7.5%.
ByteDance will continue to be majority owner of TikTok - at least 80% - under the new proposed agreement which Trump said he approved, according to a person familiar with the matter.
When Trump spoke to reporters today, he said he approved the deal "in concept." "I have given the deal my blessing," Trump said. "If they get it done, that's great. If they don't, that's okay, too."
Trump added that "...the security will be 100 percent. They'll be using separate clouds and very, very powerful security."
U.S. Will Not Have Total Control of Tik Tok
Will U.S. companiees control Tik Tok even if the deal is made?
Quite the contrary.
This contradicts Trump's earlier claim to reporters on Saturday that TikTok would be "totally controlled" by Wal-Mart and Oracle, who will own only up to a 20% share in TikTok, the person said.
Essentially if the deal even goes through, Byte Dance, Oracle, and Wal-Mart will become unequal partners in Tik Tok, but with the Chinese parent company ByteDance, still controling 80% of the company.
Oracle CEO Safra Catz said this in a statement:
"As a part of this agreement, TikTok will run on the Oracle Cloud and Oracle will become a minority investor in TikTok Global," said Oracle CEO Safra Catz.
"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."
There is also one huge caveat here.....
The Chinese Government (who actually controls Tik Tok) still will have to approve of the deal, even if all parties associated with the deal already mentioned agree.
There has been no word from China yet.
Let's see what happens now.