A recent report shows that tensions between TikTok and its potential U.S. partner, Oracle, have risen as a debate over the ownership structure of the potential U.S.-based corporation continues.
A report from the Wall Street Journal states that a disagreement between the Chinese-owned video-sharing app TikTok and its potential U.S. partner Oracle over the ownership structure for a U.S.-based version of the company has gone public.
The argument raises questions about the stability of the deal that President Donald Trump approved in principle over the weekend, which appeared to save TikTok from being banned in the U.S. All parties involved in the deal have agreed that Oracle and Walmart would take a combined 20 percent stake in TikTok Global, a new U.S.-based company planned as part of a deal to save the app from being banned over national-security concerns.
Oracle executive vice president Ken Glueck said this week: “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 majority and ByteDance will have no ownership in TikTok Global.”
ByteDance seemingly disputes this, claiming that as TikTok’s corporate parent that it would hold 80 percent interest in the newly formed TikTok Global.
On Monday, President Trump sided with Oracle over the deal telling Fox News: “They are going to own the controlling interest. Everything is going to be moved into a cloud done by Oracle…and it’s going to be totally controlled by Oracle. If we find that they don’t have total control, then we’re not going to approve the deal.”
“We will be watching it very closely. On a preliminary basis we like the fact that these are two great companies,” President Trump said discussing Oracle and Walmart.
Recently, ByteDance disputed claims by President Trump that TikTok Global will be directed by Americans and that the company will pay a $5 billion fee to the U.S. government. In a blog post entitled “clarifying groundless rumors about TikTok,” ByteDance contest the President’s assertions that the TikTok will be paying $5 billion to the U.S. government.
ByteDance stated that the figure was an estimate of the amount of taxes TikTok Global would pay over several years if the business was successful. ByteDance is currently seeking a valuation of $60 billion for TikTok Global in which ByteDance may end up owning as much as 80 percent after investments from Oracle and Walmart.
In the recent blog post, ByteDance stated: “As for the so-called $5 billion tax to the U.S. Treasury, that refers to an estimate of the corporate income tax and other taxes TikTok will have to pay in coming years as part of its business development. TikTok is confident in its future but the actual tax amount will have to be determined in accordance with the actual state of the business and American tax structures.”
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address email@example.com