Technology/Software

How to understand the TikTok sale deal and what it means for the US

how to be TikTok famous

We outline and explain the TikTok sale deal, the reasons behind its structure, and what it means for the US and its dispute with China.

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The video app Tiktok may remain now nevertheless on the US market. The future of the video app Tiktok in the US seems to be secured after President Donald Trump approved the TikTok sale deal between the Chinese owner Bytedance and US companies. Tiktok’s global business will be transferred to a new company based in the US, “probably in Texas,” Trump said.

The Department of Commerce postponed the download stop for the App in the USA, which should take effect for users starting Monday, by one week. 4besnews reiterates that Trump had called Tiktok a security risk, because the App belongs to the Chinese Bytedancecompany.

In his view, Chinese authorities could have used the app to obtain data from Americans. Following this reasoning, he laid the foundation for the removal of the app in the USA with two orders. 

According to the deal that has now been finalized, the software company Oracle is to process all data of US users and take care of the corresponding technical systems. Forbes reports that in addition, that Oracle before an initial public offer of Tiktok Global is to take over a portion of 12,5 per cent of the company and the supermarket giant Walmart will hold 7,5 per cent.

At the same time the Wall Street Journal reported that Bytedance will keep the remaining 80 percent of Tiktok Global. But: Since American investors such as the start-up financiers Sequoia and General Atlantic again held about 40 percent of Bytedance, one could speak of a US majority at Tiktok, insiders explained to the paper.

The new construct could have the advantage that no approval of the Chinese government would be necessary for the deal. Trump, for his part, had just a few days ago rejected a deal in which Oracle would act as Tiktok’stechnology partner with a minority stake.

The Department of Commerce then initiated a countdown to kick Tiktok out of the American app stores. Tiktok and Bytedance filed a lawsuit against it in Washington.He had previously demanded that the U.S. government should receive some kind of commission because it had brought about the deal. 

A few days ago he had announced the formation of a commission to promote patriotic education – the Republican justified this, among other things, by the fact that the historical significance of slavery is currently being overemphasized.

In the past, Trump has frequently attracted attention with attacks against the founder and boss of the online retailer, Jeff Bezos. Bezos privately owns the Washington Post newspaper, where Trump is often criticized.

President Trump demands that Tiktokbe completely controlled by American companies; otherwise the app – for data protection reasons – is to be banned in the USA. To this end, the US business is to be merged into a new company called Tiktok Global, in which the US groups Oracle and Walmart are to hold a combined share of around 20 percent.

In principle, the Chinese parent company Bytedance will retain 80 percent of the shares. However, these are to be distributed to existing Bytedance shareholders, which include the US companies Sequoia Capital, General Atlantic and CoatueManagement. The Americans will thus become a majority shareholder in Tiktok Global and dominate the management and board of directors. It is crucial that the Tiktok technology is to be owned by Tiktok Global, experts say.

Nathan James lives for gaming, and is a fan of everything from vintage Pong to the latest virtual reality games. He also loves to tinker with hardware in that never-ending search for more power and speed.