The weekend around September 20, 2020 was crucial for the future of Tik Tok. First Donald Trump issued a ban, then he changed his mind and approved a deal between Bytedance and the two companies Oracle and Walmart. What happens now?
The US Department of Commerce issued a Tik-Tok ban on September 18, 2020. According to this, the app should no longer be allowed in Apple and Google’s App Stores – and that already from Sunday, September 20, 2020.
Any other platform should then no longer be allowed to distribute Tik Tok either. As a result, the app would have disappeared from the surface in the USA, because users could still use it for a certain period of time. But there would have been no more updates.
But that’s not going to happen for now. US President Donald Trump approved a deal in the night before Sunday – with the software company Oracle and the retail chain Walmart.
Donald Trump approves deal on the future of Tik Tok
Bytedance, the Chinese company behind Tik Tok, is to outsource the global business of the app to a new US company called Tik Tok Global with 25,000 employees. According to Trump, it will “probably be based in Texas.
According to the US president, the deal also includes a five billion US dollar fund for the education system in the United States. The Department of Commerce also announced that the App Store ban would be postponed by one week.
In concrete terms, the future of Tik Tok would look like this: Oracle and Walmart together will receive 20 percent of Tik Tok. With a 12.5 percent share in the company, Oracle will be responsible for hosting all U.S. user data and backing up the associated computer systems.
The supermarket chain Walmart will receive the remaining 7.5 percent and is to contribute to a “commercial partnership”.
Tik Tok explains: “We are very pleased that the offer jointly developed by Tik Tok, Oracle and Walmart addresses the security concerns of the US government and secures the future of Tiktok in the USA.
Tik Tok Global is scheduled to go public in 2021. Bytedance holds the remaining 80 percent of the shares. According to the US news service Bloomberg, the valuation is 60 billion US dollars. Oracle and Walmart would have to pay twelve billion US dollars for the deal.
Future of Tik Tok: A “brand new company”
According to Trump, Tik Tok is to become a “brand new company”. “It will have nothing to do with China,” promised the US president.
American investors, including the start-up financiers Sequoia and General Atlantic, already hold around 40 percent of Bytedance. So you could say that Tik Tok Global is in US hands for the majority.
The Chinese founder Zhang Yiming and other Chinese investors are still in business. Through their shares in Bytedance, they hold a total of 36 percent of Tik Tok Global. The New York Times also writes that European investors hold another eleven percent.
So Trump hasn’t yet completely Americanized the app, but he has nevertheless taken a big step towards data security. According to the deal, Bytedance must grant Oracle full access to the app’s source code.
The software company can then also check whether there are any hidden backdoors through which data could reach China.
