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Beijing unlikely to approve ByteDance’s TikTok deal with Oracle

Reuters Shanghai | Updated on September 22, 2020 Published on September 22, 2020

A deal China’s ByteDance has struck with Oracle Corp and Walmart Inc over the future of its video-streaming app TikTok is unlikely to receive Chinese government approval, state-backed newspaper Global Times said in an editorial.

ByteDance has said it will create a US subsidiary partly owned by US majors Oracle and Walmart and managed mainly by Americans, to pacify the administration of US President Donald Trump which had planned to ban TikTok on security grounds.

Also read: TikTok’s algorithm can’t be trusted

“It is clear that these articles (terms) extensively show Washington’s bullying style and hooligan logic. They hurt China’s national security, interests and dignity,” said the English version of the editorial published late on Monday and which was also carried in the newspaper’s Chinese edition.

The unidentified author objected to a requirement that four of the five board seats of TikTok Global be occupied by Americans and only one reserved for a Chinese national, as well as the inclusion of a US-approved “national security director”.

Also read: Trump to ‘cut off’ TikTok if deal cannot be saved

It also denounced a requirement that ByteDance reveal TikTok’s source code to Oracle as part of the latter’s stake purchase, as well as the separate management of TikTok from Chinese equivalent Douyin.

“As TikTok and Douyin should have the same source code, this means the US can get to know the operations of Douyin,” the editorial continued.

Also read: ByteDance, Oracle at loggerheads over terms of TikTok agreement

“If the reorganisation of TikTok under US manipulation becomes a model, it means once any successful Chinese company expands its business to the US and becomes competitive, it will be targeted by the US and turned into a US-controlled company via trickery and coercion, which eventually serves only US interests,” the author wrote.

The Global Times is a tabloid published by the People’s Daily, the official newspaper of China’s ruling Communist Party, but does not speak on behalf of the party and government unlike its parent publication.

Over the weekend, ByteDance and Oracle announced they had reached a deal that would satisfy Trump’s call for TikTok to be sold to an American buyer or face shutdown in the US.

However, both sides have framed the deal differently in public statements.

Also read: The math doesn’t add up on Tiktok’s deal with Oracle and Walmart

ByteDance has said TikTok Global will be its subsidiary of which it will own 80 per cent.

Oracle has said ByteDance’s ownership would be distributed to ByteDance’s investors, many of which are US-based and that the Beijing-based firm itself would have no stake in TikTok Global.

The deal requires approval from regulators in both Beijing and Washington.

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Published on September 22, 2020
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