Towards the end of the TikTok soap opera? The various parties involved would have reached an agreement according to which ByteDance would create a new entity for the activities of TikTok with a seat in the United States, reports the Financial Times. Oracle would hold shares in this entity managing all of TikTok’s activities, and not just those in the United States, but ByteDance would remain the majority shareholder.
The agreement would also ultimately include Walmart: the American distributor, which had initially committed alongside Microsoft, could hold minority stakes in the new entity, like other American investors.
Creation of 20,000 jobs
The story began in the summer when Donald Trump accused the Chinese company-owned video creation and sharing application of spying on Beijing’s behalf. The American president then adopts a measure leading to ban the application of the country if its activities in the United States, Australia, New Zealand and Canada are not sold to an American company.
Microsoft then enters the game. The Redmond firm proposes, as a first step, to buy the activities of TikTok in the United States. Quickly, Microsoft becomes too greedy and wishes to acquire all the activities of the application. A request categorically refused by ByteDance. Twitter, then Oracle and finally Walmart then declared to have an interest in the purchase of this application.
A mixed-up conflict resolution?
China recently passed new regulations that prevent ByteDance from selling its algorithms to a non-Chinese company. A point that severely limits agreements on a possible takeover of TikTok. Hence this half-hearted agreement in which Oracle takes a minority stake and must guarantee that data concerning American citizens will be stored in the United States.
“An agreement whereby Oracle supports hosting without the source code and without significant operational changes would not address any of the legitimate concerns about TikTok.”, commented on Twitter a former head of security at Facebook, Alex Stamos, as The Verge noted.
However, several points may satisfy the President of the United States. On the one hand, the president of Oracle Larry Ellison as well as the CEO of the Safra Catz group are supporters of Donald Trump, notes the FT. On the other hand, the agreement provides for the creation of 20,000 jobs in the United States. A welcome promise for the President of the United States as elections approach, as millions of Americans have lost their jobs due to the Covid-19 pandemic.