US TikTok buyout further extended until November elections
The U.S. TikTok deal is expected to drag over until after the November elections as the details of the buyout are not yet decided by the stakeholders and regulators. A delay is expected because of the upcoming elections and the President's health concerns, which has caused the matter to be delayed further.
In a bid to buy stakes in the video app TikTok, US regulators are drafting a deal with ByteDance Ltd., in order to solve security issues. Oracle Corp., and other companies leading the deal are expecting a delay in the matters to get resolved, and are ready for it to be dragged until after the US elections in November for the buy-out to be officiated.
The primary concerns with the deal in question are data security and the Chinese ownership of the global app. A likely ban on TikTok is also proposed by President Trump until mid-November if the deal doesn’t go through. However, some sources have said that the date could be extended if negotiations continue.
The details of the deal are still being decided, and even though Oracle Corp. received an endorsement from President Trump, the administration have their reservations with the fine-print of the deal. The process is taking more time than expected because of the number of details regarding data security that need to be decided. With the upcoming election and the President’s Corona positive diagnosis, the TikTok buy-out deal is receiving little time and attention.
With Trump’s proposed ban on TikTok in August, the app took center-stage in the US-China building tensions, and the owner of TikTok, ByteDance Inc. – a Chinese software giant, was forced into talks of the deal with the U.S. administration. The agreement was made in September, and Walmart and Oracle were proposed to buy stakes in the app. Walmart is expected to take control of TikTok’s products and features, meanwhile signing some ‘commercial agreements’ with the app.
Under the proposed deal, Oracle will be overlooking the data security and storage aspect of the app, without having any role in the business operations of TikTok.
A division of shares between the stakeholders is yet to be decided. Initially it was proposed that Oracle and Walmart will have a combined share of 20% in the resulting company, but Trump and Oracle has made it clear that the deal will not go through if there is any Chinese involvement in the new entity. However, the Chinese software giant ByteDance says it will hold 80% of the shares in the new TikTok. It is also unexpected of China to authorize the deal without giving majority shares to ByteDance.
The proposed ban on TikTok by Trump is not a lone incident; growing wariness towards Chinese internet apps is not only limited to the U.S. India also banned TikTok in June due to security concerns and most European countries are hesitant to allow Chinese software and apps to be used in the telecommunications sector over the same fear.