The Chinese-owned video-sharing app TikTok recently laid out a partnership with U.S. companies Oracle and Walmart in a deal that has delayed the banning of the app for American users — here are five key facts about the deal currently pending government approval.
Breitbart News recently reported that President Trump gave preliminary approval to a deal in which Oracle and Walmart will partner with the popular Chinese-owned video-sharing app TikTok in the United States, allowing the app to continue to operate within the country.
Speaking to reporters on the White House South Lawn before departing for North Carolina, President Trump stated: “I have given the deal my blessing — if they get it done that’s great, if they don’t that’s okay too. I approved the deal in concept.”
So what does the deal involve?
1: The creation of TikTok Global — a U.S. based company
As part of the deal, a new U.S.-based company named TikTok Global will be formed with its five-person board featuring four Americans. Oracle and Walmart will own 20 percent of TikTok Global with Oracle holding 12.5 percent of the company and Walmart holding 7.5 percent. The company’s also stated that they plan for TikTok Global to announce an IPO in less than one year.
2: Job creation and tax revenue
Oracle and Walmart have claimed that the formation of TikTok Global will generate 25,000 new jobs in the U.S and generate $5 billion in tax revenue.
ByteDance appears to be disputing claims 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 President Trump’s assertion 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.
3: TikTok’s U.S. audience has reached 100 million and Growing
TikTok’s monthly active users in the U.S. has now surpassed 100 million users, a massive increase from just 11 million users in 2018. TikTok has a global monthly active user count of 689 million, meaning that U.S. users account for approximately 14.5 percent of TikTok’s userbase.
4: China has not approved the TikTok deal
Although the TikTok Global deal has been approved in a preliminary sense in the United States, Chinese regulators have yet to approve the deal. Last month, China updated its regulations governing how technology can be exported, adding 23 new categories of technology that require government approval before being sold. Chinese officials have not explicitly stated that the sale of TikTok would be affected by these regulations, but they do add a new level of red tape to bypass for the sale to go through.
However, the WSJ cited sources that believe the update to the tech export rules which were last changed in 2008 were made with TikTok’s sale in mind. China’s Xinhua news agency appeared to confirm this in an article on Sunday citing a trade adviser to the government who said that ByteDance will “need to comply” with the new rules.
5: U.S. courts could prevent deal going ahead
While President Trump has approved the deal in a preliminary sense, U.S. courts still have the power to prevent the deal from going ahead. A federal judge in California recently halted the removal of WeChat from U.S. app stores with an injunction, despite orders from President Trump to ban the Chinese app.
The judge cited harm done to the apps Chinese users within the U.S., this indicated that U.S. courts could also prevent TikTok from being banned in the U.S. even if the deal does not go ahead.
Read more of Breitbart News’ reporting on TikTok here.
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 firstname.lastname@example.org