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Trump decision on Oracle TikTok looms ahead of Sunday deadline, deal would include Walmart

  • September 21, 2020

President Trump is expected to decide if TikTok’s global business will be run by a standalone company headquartered in the U.S. before Sunday’s deadline.

Investors in the deal for the popular social media app would include Walmart, a source told USA TODAY. China’s ByteDance would maintain majority ownership.

TikTok declined to comment. Walmart also declined to comment, pointing to its statement from Sunday that it “continues to have an interest in a TikTok investment and continues discussions with ByteDance leadership and other interested parties.”

Citing national security concerns, top Republican lawmakers led by Sen. Marco Rubio of Florida urged the Trump administration to reject the TikTok deal if it does not contain strong enough protections for the data of U.S. users. Their chief concern: That Bytedance could gain access to the data of an estimated 100 million TikTok users in the U.S. 

“Any deal between an American company and ByteDance must ensure that TikTok’s U.S. operations, data, and algorithms are entirely outside the control of ByteDance or any Chinese-state directed actors,” they wrote in a letter to Trump on Wednesday.

On Thursday, Rubio tweeted that he had had “informative talks” with Oracle and the Treasury Department.

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President Trump told reporters Wednesday that he needed to hear more details. He was to be briefed on the deal Thursday morning.

“Just conceptually, I can tell you I don’t like that,” Trump said after a reporter told him that TikTok’s Chinese owner would retain a majority of the company’s assets.

“I’m not prepared to sign off on anything,” he said.

The Treasury Department-led Committee on Foreign Investment in the U.S. reviewed the deal at its regular meeting this week. Top Trump administration officials have raised concern that Oracle’s proposal falls short of assuaging national security concerns, according to published reports. Their input could influence the decision but Trump has the final say.

An AFP collaborator poses for a picture using the smart phone application TikTok on December 14, 2018 in Paris.

Oracle has taken the lead in the proposal as TikTok’s U.S. technology partner to address the Trump administration’s national security concerns. 

Oracle has a close relationship with the Trump administration and a long track record with the U.S. government. Larry Ellison, Oracle’s co-founder and chairman, has publicly supported Trump and hosted a fundraiser for Trump’s reelection campaign in February. CEO Safra Catz was part of the president’s transition team.

“We’re going to make a decision pretty soon,” Trump told reporters at the White House Tuesday. “I have a high respect for Larry Ellison. He’s somebody I know. He’s been really a terrific guy for a long time. So we’re going to take a look. I heard they’re very close to a deal.”

The White House gave ByteDance 45 days to dispose of its U.S. operations or risk being banned. The deadline is Sunday.

The administration alleged the Chinese-owned app poses a security threat. TikTok says it does not store U.S. user data in China and would not hand over that data to Beijing.

The formation of a new U.S. entity puts distance between TikTok and its Chinese ownership and dodges new Chinese regulations that could have blocked a sale, but the deal falls short of Trump’s Aug. 6 executive order that demanded TikTok’s U.S. business be sold outright.

The deal does not include a payment to the U.S. government but includes a pledge to create 20,000 new jobs. Trump admitted Wednesday there is no legal way for the federal government to get a cut of the deal.

If Trump greenlights the deal, Wedbush Securities analyst Daniel Ives does not expect much to change for consumers if the deal goes through.

“The average teen or tween using TikTok will not know the difference,” Ives said.

Contributing: Kelly Tyko

Article source: http://rssfeeds.usatoday.com/~/635669625/0/usatoday-techtopstories~Trump-decision-on-Oracle-TikTok-looms-ahead-of-Sunday-deadline-deal-would-include-Walmart/

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