The TikTok Deal Is Much Less Than Trump Is Making It Out to Be

The TikTok Deal Is Much Less Than Trump Is Making It Out to Be
Chinese-owned apps TikTok and WeChat displayed on a smartphone, Beijing, China, Aug. 6, 2020 (AP photo by Mark Schiefelbein).

Editor’s Note: Every Wednesday, WPR contributor Lavender Au and Newsletter and Engagement Editor Benjamin Wilhelm curate the week’s top news and expert analysis on China.

TikTok was set to be taken off U.S. app stores this past weekend, but the news that the Chinese-owned app struck a tentative deal with Oracle and Walmart allowed it a one-week reprieve from President Donald Trump’s ban. The deal still must be formally reviewed by the Trump administration, and the Chinese government will need to approve it, too. China’s Ministry of Foreign Affairs spokesman Zhao Lijian has branded the ban, and other moves against Chinese tech companies by Trump in the name of national security, a “flagrant denial of the principles of market economy and fair competition.”

The deal on the table proposes changes to TikTok’s server hosting and ownership structure, and a review of its source code and app updates. Oracle will host the TikTok data on cloud servers in the United States. In terms of jurisdiction, though, not much has changed. TikTok’s data is already stored in the U.S. with backup redundancy in Singapore. Oracle will also review the app’s source code. The deal will reportedly create a new entity, TikTok Global, of which 20 percent will go to Oracle and Walmart. Since American venture capital investors already hold a 40 percent stake in ByteDance, TikTok’s parent company in China, they claim this satisfies Trump’s condition of American ownership.

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