U.S. News

President Trump Gives Blessing to TikTok Deal with Oracle and Walmart

Announcement Comes After Commerce Sec. Ross Announces Download Ban

Editor Tyler Bagent

9/18/2020

On September 19th, 2020, President Donald Trump announced that he approved of a potential deal between Oracle, Walmart, and ByteDance which would move towards a complete transfer of US operations to a new company.

Before the tentative deal was approved, the US Commerce Department announced on Friday that the Trump Administration would ban downloads of WeChat and Tiktok, with Secretary Wilbur Ross saying that “today’s actions prove once again that President Trump will do everything in his power to guarantee our national security and protect Americans from the threats of the Chinese Communist Party.” He accused China of a “malicious collection of American citizens’ personal data” and said that the administration looks to “promot[e] our national values.” The Commerce Department slammed the apps for taking “large swaths of data... including network activity, location data, and browsing and search histories.”

On Saturday, the Trump Administration announced that it would postpone the download ban by one week as negotiations continue. The current order, just put in place, gives the three companies until 11:59pm on September 27th to finalize the deal. This deal would create a new company, TikTok Global, which would handle US operations. President Trump announced that this company would likely be placed in Texas. If the proposal is approved by all sides, all US data would be managed by Oracle, looking to fulfill the Trump Administration’s requirements for national security. The deal would also include a partnership with Walmart, with Walmart holding a commercial role.

Despite giving their blessing to the deal, the Trump Administration received few of their priorities. ByteDance still will own 80% of the new ‘TikTok Global,’ as opposed to an entirely new US-owned company. While they did agree to store user data in the United States, TikTok was already mostly doing that. Most of the original concerns dealing with national security were not resolved. However, it’s not all bad for President Trump. As part of the deal, the United States will receive five billion dollars for Trump’s new ‘patriotic education’ program. It is also estimated that this deal will create 25,000 new jobs, presumably in Texas.

While the deal remains tentative, the three sides have largely agreed to the terms that will be seen in the final deal. This is a developing story, so news will gradually break over the next several days. Regardless, what we’ve already seen could have major impacts in the treatment of Chinese-owned apps around the world.