An executive order signed by U.S. President Donald Trump might have postponed the inevitable when it comes to banning TikTok in the country. However, it appears a plan is in the pipeline to bring the app back to relevant online stores, but it involves an acquisition play in which Oracle and other U.S. investors will be involved. In short, for TikTok to remain a part of the U.S., its Chinese-based majority owner’s role will have to be diminished severely.
Parent company of TikTok, ByteTance, will reportedly maintain minority ownership of the video-uploading platform, assuming a deal is finalized
While talks are ongoing and negotiations are underway, no deal has been set in stone, with NPR reporting that ByteDance, TikTok’s parent company, will maintain a minority stake in the firm if a deal materializes. As for the platform’s app collection, algorithm, and software updates, Oracle will overtake them, suggesting that a majority share of U.S. companies is mandatory for TikTok to make a return to the U.S. However, more changes could be drafted in the coming weeks.
“The goal is for Oracle to effectively monitor and provide oversight with what is going on with TikTok. ByteDance wouldn't completely go away, but it would minimize Chinese ownership.”
Representatives from Oracle and the White House held a meeting on Friday regarding a potential deal, with another meeting reportedly scheduled for next week. The discussions included Oracle voicing an interest in acquiring a stake in TikTok worth tens of billions, with the rest of the deal currently in limbo. Officials from Microsoft and Walmart may have also been present at the meeting because these individuals declined to comment. Perhaps the biggest hurdle to acquiring a majority stake in TikTok stems from appeasing Congress.
A federal law that was passed by Congress states that TikTok must execute what is called ‘qualified divestiture’ from ByteDance in order to maintain its operations in the U.S., with one Congressional staffer stating that there should be zero operational relationship with ByteDance to avoid any backdoor from which China can gain access to. Also, finalizing a value for TikTok appears to be another hurdle, with the app believing itself to be worth billions, making it next to impossible for any company to acquire alone.
In short, things could get more complicated for TikTok users in the U.S. in the near future. If a deal is not inked, it could spell trouble for millions of Americans who use the platform for entertainment, education, leisure, or income generation.
News Source: NPR
