U.S. readies TikTok ban, status of Oracle-Walmart deal uncertain

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U.S. readies TikTok ban, status of Oracle-Walmart deal uncertain

By Dan Berthiaume - 09/18/2020

The saga of whether TikTok will remain operational in the U.S. continues with the Trump administration announcing a Sept. 20 shutdown.

In an official statement released Friday, Sept. 18, the U.S. Commerce Department said it will prohibit all U.S. business transactions involving the Chinese short video platform TikTok and social media/mobile payment app WeChat. 

This would effectively make it illegal for any U.S. company to distribute or provide updates for either app, but existing U.S. users at that time would still have access to their most recently downloaded version. Payment and money transfers would not be available via WeChat in the U.S., however. If the Trump administration does not approve a deal for an American company to take over TikTok’s U.S. business by Thursday, Nov. 12, it will become completely banned and inaccessible within the U.S. 

In a brief statement released Sept. 14, Oracle confirmed it had reached an agreement with that would see Oracle become the “trusted technology partner” of TikTok in the U.S., but not become the outright owner of its U.S. business. Walmart, which had been a minority investor in a previously rejected TikTok purchase offer from Microsoft, said it was continuing discussions with the social platform and has been mentioned in media reports as a possible participant in the Oracle deal.

As recently as Wednesday, Sept. 16, the South China Morning Post reported TikTok was willing to give U.S. companies, including Oracle and Walmart, combined 60% ownership of a new company called TikTok Global that would control its U.S. operations. Oracle would reportedly receive a 20% stake in that deal, which the Trump administration has essentially rejected with its impending ban. 

In another interesting development, Instagram head Adam Mosseri tweeted, “I’ve said this before, but a US TikTok ban would be quite bad for Instagram, Facebook, and the internet more broadly.” Mosseri tweeted this statement despite the fact Instagram recently unveiled a TikTok-like feature called Reels, and could potentially benefit from a TikTok ban. Forbes reports that TikTok is considering Instagram co-founder Kevin Systrom, who left Instagram parent company Facebook in 2018, to take its vacant CEO position.

The U.S. government has publicly stated it is concerned about links between TikTok and WeChat and the Chinese Communist Party. “At the president’s direction, we have taken significant action to combat China’s malicious collection of American citizens’ personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations,” said Wilbur Ross, secretary of the U.S. Department of Commerce.