He had heard that Oracle Corp was very close to a deal over ByteDance’s TikTok, said United States President Donald Trump on Tuesday even as reports quoted sources that the Chinese owner of TikTok was seeking to hold on to a majority stake in the US business of its popular short video sharing app.
Due to concerns in the US that the data of eh millions of American users of TikTok could be handed over to China’s Communist Party government, Trump has ordered ByteDance to divest TikTok and sell it to an American company to ensure data safety. He has also issued a threat of imposing a ban on the app in the US as soon as Sunday if the selloff of the app was not done by ByteDance.
According to reports, ByteDance wants to hold on to a majority stake in TikTok’s global business while also creating a headquarters for TikTok in the US.
ByteDance has also offered to create 20,000 U.S. jobs with TikTok, US Treasury Secretary Steven Mnuchin said on Monday.
Under the proposed deal with Oracle by ByteDance, the US company will become the technology partner for TikTok and would be responsible for the management of TikTok’s data while taking up a minority stake in the company.
“I heard they are very close to a deal,” Trump said. A decision of whether to approve the deal would be taken by his administration soon, he added.
According to reports, supervision of how TikTok will be operated will be done by the Committee on Foreign Investment in the United States (CFIUS), the US government panel that is overseeing the deal talks, according to the proposal for the deal by ByteDance.
Discussions on the proposal of ByteDance were conducted at the White House by Mnuchin, who chairs CFIUS, and Commerce Secretary Wilbur Ross on Tuesday, claimed reports quoting sources.
Reports however said that there was no clarity of whether the deal would be approved by Trump.
No comments on the issue were available on the issue.
If Trump and the US government agencies and departments that comprise CFIUS approves a deal that would allow ByteDance to retain majority ownership in TikTok and allow it to operate in the country, it would be U-turn for the US administration.
ByteDance was ordered to divest TikTok in the United States by Trump through an executive order issued by him on August 14.
A major departure from the traditional national security reviews of deals that are majorly conducted by US civil servants would be marked if the deal was approved, said some CFIUS experts.
“Nothing about this transaction is usual. It appears to be in the hands of the politicians rather than the professional CFIUS staff,” said Paul Marquardt, a regulatory lawyer at Cleary Gottlieb Steen & Hamilton LLP. “What is extraordinary here is how public and political the process is, and the continuation of negotiations after the issuance of a divestiture order.”
(Adapted from Reuters.com)