TikTok Manages to Swerve Sunday Ban

President Trump Gave Oracle and Walmart his Blessing to pursue a deal with with the video-sharing app

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After months of national security concerns, legal battles, and speculation, TikTok has managed to evade President Trump’s proposed ban. On Saturday, President Trump confirmed he had approved a deal between the Chinese-owned video-sharing app and Oracle and Walmart, an American software developer, and American-owned retail corporation respectively. 

The deal, which succeeded against one with Microsoft or Twitter, will see TikTok’s American arm become a US-based company: TikTok Global. Under the deal, Oracle and Walmart will own a total of 20% of the company and four out of five of the new company’s board members will be American (including Walmart CEO Doug McMillan), except for Zhang Yiming, ByteDance’s chief executive, according to a source familiar with the situation

TikTok Global has proposed 25,000 new US jobs with the company and, addressing the main issue of national security (at least somewhat), Oracle will become a “trusted tech partner,” and will host all US user data. It will also go public eventually, allowing for more transparency (and scrutiny). 

But, many have noted the shortcomings of the deal, particularly in relation to President Trump’s initial demand for a full sale of TikTok’s US operations. 80% of TikTok Global will still be owned by ByteDance, TikTok’s parent company and, according to ByteDance, the deal “does not involve the transfer of any algorithms and technologies,” although Oracle has the “authority to check the source code for TikTok USA.”

It’s also apparent that some of the finer details of the deal are a little fuzzier. Trump stated that TikTok would pay $5 billion to the US Treasury Department and will fund a $5 billion education initiative which would be used to educate people about the “real history” of America (according to President Trump). In a blog post addressing these claims, ByteDance stated that the $5 billion was merely a forecast of the amount of income tax and other operating taxes “that TikTok will need to pay for its business development in the next few years.” 

The company added: “TikTok is full of confidence in the future development, but the actual tax amount still needs to be determined according to the actual development of the business and the tax structure of the United States. The tax forecast has nothing to do with this cooperation plan.” A spokesperson for TikTok said the company heard about the education fund from news reports. 

Before the deal was announced, it seemed that the Trump administration was ready to ban new downloads of the app as of last night (September 20) in accordance with a new executive order filed on Friday. In response, TikTok filed a last-minute lawsuit against the administration, claiming that such a move was a violation of free speech. This isn’t the first time TikTok has filed a lawsuit over the potential ban. TikTok’s interim CEO, Vanessa Pappas, called on Facebook and Instagram to “publicly join our challenge and support our litigation,” according to The Verge.

As of now, TikTok is safe in the US. At least for another week, that is. Hopefully Oracle, Walmart and ByteDance can “reach a cooperation agreement that meets the legal requirements of the United States and China”.