Donald Trump approves proposed deal to save TikTok in the US

Sep 21, 2020 | Mobile, Regulation, Social, USA

TikTok user spending ‘shot up nearly 400% in January 2021 to $128m’
Donald Trump says he has given his "blessing" to a proposed deal that could prevent TikTok from being banned in the US, that will see the video-sharing app partnering with Oracle.

The app, along with WeChat, had previously faced a download ban after the US government said they were both “active participants in China’s civil-military fusion” and alleged that they collect “vast swaths of data from users, including network activity, location data, and browsing and search histories.”

But it will now continue to operate after the deal with tech giant Oracle saw TikTok complying to orders for it to join forces with an American company.

“I have given the deal my blessing,” Trump said on Saturday (September 19). “If they get it done, that’s great. If they don’t, that’s OK too.”

He told reporters at the White House he is backing a deal with Oracle and Walmart that would create a new company to oversee TikTok’s US operations.

Trump said the new company would be “totally controlled by Oracle and Walmart”.

People in the US were set to be banned from downloading the video-sharing app – as well as another Chinese app, WeChat – on Sunday, following White House concerns about the security of user data.

Reuters news agency reported on Thursday the new company, called TikTok Global, will have a majority of American directors, a US chief executive and a security expert on board.

Trump added that the new company will be hiring at least 25,000 people and making a $5 billion contribution to an American education fund.

Oracle and Walmart are expected to take significant equity stakes and ByteDance – which owns TikTok – has agreed to significant security safeguards, with Oracle housing all data and having the right to inspect the app’s source code.

However, China must still approve the deal.

TikTok said in a statement: “We are pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the US Administration and settle questions around TikTok’s future in the US.”

It added: “Our team works tirelessly to provide a safe and inclusive platform and we’re thrilled that we will be able to continue serving our amazingly diverse and creative community.”

Trump said: “We’ll see whether or not it all happens.”

It is not immediately clear if the commerce department will row back on its plans to force Google and Apple to stop offering TikTok on their US app stores on Sunday.

WeChat legal tussle

In related news A judge said a ban would affect WeChat users’ first amendment rights as it removes their platform for communication.

Donald Trump’s plan to block downloads of the Chinese messaging and payment app WeChat has been blocked by a federal judge in California on first amendment grounds.

The ruling put a temporary block on the president’s executive order which would have effectively banned the app on Sunday, despite Mr Trump and his administration describing it as a national security threat.

Judge Laurel Beeler said the government’s actions would affect WeChat users’ first amendment rights – as a ban on the app removes their platform for communication.

Donald Trump had sought to ban WeChat through an executive order
WeChat is popular with many Chinese-speaking Americans and serves as a lifeline to friends, family, customers and business contacts in China.

It is owned by Chinese tech giant Tencent.

A preliminary injunction against the US government’s ban was brought by a non-profit organisation called the US WeChat Users Alliance, which says it has no connection to Tencent.

The group, which features prominent Chinese-American lawyers, said the executive order risked infringing the constitutional rights of the app’s 19 million regular users in the country.