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Entertainment Inside the 'Mess' of TikTok's Oracle Deal: 3 Things to Watch

01:33  22 september  2020
01:33  22 september  2020 Source:   thewrap.com

TikTok Says It Will Sue Trump Administration Over Executive Order Demanding It Be Sold in U.S.

  TikTok Says It Will Sue Trump Administration Over Executive Order Demanding It Be Sold in U.S. TikTok says it will file a lawsuit against President Donald Trump's administration over his executive order demanding ByteDance — TikTok's Beijing-based parent company — sell or spin off its U.S. operations within 90 days. "Even though we strongly disagree with the Administration's concerns, for nearly a year we have sought to engage in good faith to provide a constructive solution," ByteDance spokesperson Josh Gartner said in a statement to TheWrap Saturday. "What we encountered instead was a lack of due process as the Administration paid no attention to facts and tried to insert itself into negotiations between private businesses.

However, the TikTok deal does not affect a ban on the Chinese-owned messaging and payments TikTok ' s data would be stored by Oracle , which would have the right to inspect its source code. The app collects a huge amount of user data - including what videos people watch and comment on

After insisting that TikTok ’ s U.S. operations be sold over national security concerns, the Trump administration now appears to be amenable to a watered-down deal where Oracle would become the video app’s technology partner. Readers, we’re baffled — and have several questions.

Tik Tok Oracle White House © TheWrap Tik Tok Oracle White House

Signing a multibillion-dollar deal is never easy — and that's especially the case with Oracle's proposed bid to take over TikTok's U.S. operations. The bid appeared to be nearing the finish line this past weekend, only to hit more roadblocks on Monday.

"This whole process has been a mess," Martin Chorzempa, a research fellow at the Peterson Institute for International Economics, told the Associated Press — and that was a week ago, before the latest ups and downs.

supermarket giant Walmart allies with Microsoft for Tiktok takeover

 supermarket giant Walmart allies with Microsoft for Tiktok takeover © Shutterstock Together with Microsoft: Walmart wants Tiktok. According to a media report, Walmart wants to team up with Microsoft to bid for Tiktok. A deal could meanwhile be announced in the coming days. The story of a possible sale of the popular Tiktok video app has had a surprising twist. Because the US retail group Walmart wants to ally itself according to an report from CNBC with Microsoft in order to submit a joint takeover offer.

Oracle disputed part of TikTok ’ s description of the deal . On Monday, Ken Glueck, an executive at the company, said in a statement that upon “creation of TikTok Global, Oracle /Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the

3 Stocks To Watch In The Coming Week: Nike, Oracle , Costco Wholesale. "If the reorganization of TikTok under U.S. manipulation becomes a model, it means once any successful Chinese company ByteDance has also said Oracle 's ability to inspect TikTok ' s source code before investing is akin to

Lingering questions remain about the framework of the deal, as well as reservations the Trump administration has over data security concerns, leading to more questions than answers.

Here are three to consider:

1. Do we have a deal?

This is the big one, obviously. And right now, the answer seems to change by the hour.

On Saturday, President Trump said he had given his "blessing" to the proposed Oracle-TikTok deal, "in concept." On Monday, though, he appeared to walk back that statement.

Just two days later, in an appearance on Fox News, the president said his administration would not approvd any deal that would allow ByteDance, TikTok's Beijing-based parent company, with some control of TikTok Global, the U.S. subsidiary that would stem from Oracle's bid. "They will have nothing to do with it," the president said about ByteDance. "And if they do, we just won't make the deal."

A Casualty in Trump’s China War: TikTok’s Kevin Mayer

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TikTok and Oracle were reportedly in talks this week with Trump administration officials on details of the deal , including ownership stakes in the new venture and control over the algorithms used to recommend videos to users. Oracle has close ties to Trump – Chairman Larry Ellison hosted a

The TikTok sale saga reached an apparent conclusion over the weekend when President Donald Trump approved a deal . The agreement would allow Oracle Corp. and Walmart Inc. to buy a minority stake in a new joint entity, called TikTok Global.

The president added: "It's going to be controlled, totally controlled by Oracle, and I guess they're going public, and they're buying out the rest of it. They're buying out a lot, and if we find that they don't have total control, then we're not going to approve the deal."

That's a major roadblock, considering the current framework of the deal.

Oracle and Walmart, which partnered on the deal, have proposed grabbing up to a 20% cut in TikTok Global — a subsidiary that expects to file for an initial public offering sometime in 2021, TheWrap reported last week. (Oracle would hold a 12.5% cut.) ByteDance, as Bloomberg reported on Monday, would retain up to the remaining 80% of the offshoot. That's where it gets messy. While ByteDance has backing from major U.S. investors, including Sequoia Capital and General Atlantic, the fact it would retain so much control could be a real deal-breaker for the White House.

TikTok's US Spinoff Would File for IPO in 2021

  TikTok's US Spinoff Would File for IPO in 2021 TikTok Global, the offshoot of TikTok that would be formed if Oracle's bid for the app's American business is approved, would look to file for an initial public offering (IPO) in about a year, a person familiar with the company told TheWrap on Thursday. CNBC's Julia Boorstin was the first person to report the news. It's unclear which U.S. exchange TikTok Global would be listed on, but the tech-heavy Nasdaq would appear to be the favorite. Oracle's bid to become TikTok's "trusted technology partner" in the U.S. is currently being reviewed by federal officials.

“Upon creation of TikTok Global, Oracle /Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be In its statement, ByteDance said the deal doesn’t involve the transfer of any technologies — such as TikTok ’ s signature algorithm — though

TikTok is still indicating it is not seeking to provide the algorithms driving the apps’ recommendations to the new buyer. “So either it would have to be TikTok ’ s recommendation algorithm relies on domestic technology. Last month Bloomberg likened a sale of TikTok without the algorithm to a sale of KFC

There are two real options at play here. The first is that the Oracle deal is approved anyway — and the president caves on the ownership issue. Or it gets blocked by the government, and Oracle and TikTok have to answer why they felt it was worth pushing a deal that didn't meet one of the administration's clear stipulations. In addition, the odds that TikTok gets booted from the U.S. in early November would jump considerably.

2. Would the Oracle deal solve national security concerns?

Set aside the ownership issue for a moment. Even if the Oracle deal is approved, it's still worth asking if this deal resolves the national security concerns the Trump administration was worried about in the first place.

Here's what we know: Oracle would become TikTok's "trusted technology provider" in the U.S., meaning it would host American user data on its cloud. But it's unclear if that arrangement would completely block ByteDance from being able to access American user data — and that could be an issue. The administration has voiced concern that the app doubles as a data collection tool for China's Communist government even though TikTok has denied ever sharing user data with Beijing.

President Donald Trump Agrees To TikTok-Oracle-Walmart Partnership

  President Donald Trump Agrees To TikTok-Oracle-Walmart Partnership "I am and I'm so excited. I feel very maternal and motherly," she added.

(Bloomberg) -- The TikTok sale saga reached an apparent conclusion over the weekend when President Donald Trump approved a deal . The agreement would allow Oracle Corp. and Walmart Inc. to buy a minority stake in a new joint entity, called TikTok Global.

The TikTok deal was forced by a pair of bans Trump issued in August over concerns that ByteDance posed a national security risk, thrusting the TikTok said in a statement that it was “pleased that the proposal by TikTok , Oracle , and Walmart will resolve the security concerns of the U. S . administration

But ByteDance, as a Chinese firm, would be legally compelled to share user data — or any other information — if the Chinese government requested it. And as Stratechery's Ben Thompson pointed out, TikTok's privacy policy explicitly says it "may share" user information "with a parent, subsidiary, or other affiliate of our corporate group." In other words — it would have to share information with China's government. "Moreover, this requisition of data is not subject to warrants or courts, as is the case with U.S. government requests for data from Facebook or any other entity," Thompson explained.

That arrangement led the U.S. military to ban members from using TikTok on government-issued phones late last year. Military officials also encouraged troops to delete the app from their personal phones as well. And last month, the senate unanimously voted to ban TikTok from work devices, while also pointing to data security issues.

Compounding the data concerns, under the proposed deal ByteDance would retain control of its source code. Oracle would be able to review its code for any potential backdoor openings to China, but that may be insufficient for an administration worried about China's government influencing 100 million American users. By controlling its code, ByteDance maintains power over TikTok's algorithm, which determines what does and doesn't go viral on the app. In July, Trump had said the app would be banned in the U.S. if it didn't relinquish control of the company and its algorithm to an American firm.

China probably does not want to agree to TikTok deal with Oracle and Walmart - Oracle shares a little easier

 China probably does not want to agree to TikTok deal with Oracle and Walmart - Oracle shares a little easier According to a Chinese newspaper, the government in Beijing will probably not agree to the planned restructuring of TikTok's US business. © Provided by Finances.net SAEED KHAN / AFP / Getty Images The terms of the deal with US corporations Oracle and Walmart "violate China's national security, interests and dignity," it said on Tuesday Issued a comment in the "Global Times".

And lawmakers like Sen. Marco Rubio (R-Florida) have already raised concerns ByteDance's continued control of its algorithm could make any deal worthless.

"If China continues to control the code, as I understand they would in this deal, they could put in that code an instruction to secretly send data back to China, to the mainland," Rubio said on Sunday. "No matter where the actual data is housed there can be something embedded in that code that sends it the other way."

3. What education fund?

Trump had said any TikTok deal would need to include a cut, similar to a finder's fee, for the U.S. government. That requirement appears to be evolving, though, as the president this weekend said any approved deal would need to earmark $5 billion for an education fund "so we can educate people as to [the] real history our country — the real history, not the fake history." It's unclear which company would contribute the $5 billion or if it would be split between Oracle and ByteDance.

Reps for TikTok, Oracle and the U.S. Treasury did not respond to TheWrap's request for comment on the matter.

On Sunday, a rep for ByteDance appeared to be thrown off by the potential education fund. "Some news media reported that TikTok will set up a $5 billion education fund in the United States," ByteDance told CNN. "We would like to clarify that it was also our first time hearing about the news."

It's also not clear whether the education fund would completely replace the government cut the president had said he wanted, or if they're both expected as part of a deal. As with most other aspects of the TiKTok-Oracle saga, it's murky.

ByteDance plans to IPO TikTok to convince Washington

 ByteDance plans to IPO TikTok to convince Washington © CHINA OUT / REUTERS An IPO of TikTok is said to be one of the biggest in the tech industry. (Photo illustration) With three days to go before the deadline for TikTok's fate in the United States, negotiators were still scrambling on Thursday to find a new ownership structure for the popular Chinese video app that was acceptable to both for Beijing than for Washington. New twist in the TikTok soap opera.


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Trump: “Not happy” if the Chinese keep a majority in Tiktok .
© t3n.de Trump: “Not happy” if the Chinese keep a majority in Tiktok The video app Tiktok tried to secure its future in the USA through a deal to secure with the software group Oracle. But US President Donald Trump still has doubts - and time is on his side. US President Donald Trump has dampened prospects for the deal that is supposed to save the video app Tiktok in the US.

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