The TikTok Saga continues: Deal with Oracle and Walmart on hold
It would be hard to squeeze this ongoing story into a 60-second TikTok.
Queenie WongFormer Senior Writer
Queenie Wong was a senior writer for CNET News, focusing on social media companies including Facebook's parent company Meta, Twitter and TikTok. Before joining CNET, she worked for The Mercury News in San Jose and the Statesman Journal in Salem, Oregon. A native of Southern California, she took her first journalism class in middle school.
ExpertiseI've been writing about social media since 2015 but have previously covered politics, crime and education. I also have a degree in studio art.Credentials
On Wednesday, The Wall Street Journal reported that a complex deal involving
had been shelved as the Biden administration reviews the
risks posed by TikTok and other Chinese-owned apps. The Journal cited people familiar with the situation.
TikTok has been a political football since last summer, when then-President Donald Trump issued a pair of executive orders that cited the
data collection practices as national security concerns. One of the executive orders barred transactions with TikTok, while the other required the sale of the US business. The orders, which would've effectively banned TikTok, prompted a scramble to find a buyer for the popular app. Oracle and Walmart struck a complex deal that appeared to have Trump's blessing but wasn't completed before he left office.
TikTok, Oracle and Walmart didn't immediately respond to requests for comment.
The new and indefinite pause on the sale comes after a series of court cases brought by TikTok and content creators to block Trump's proposed ban. In December, a federal judge said the
had "likely overstepped" its authority in pushing to ban the app. The judge's order prevented the government from blocking internet hosting companies, content delivery networks and other services from working with TikTok.
Here's what you need to know about the complex drama:
Alright, so if a deal happened, what would it look like?
That's a big "if" given all that's happened in this saga. If a deal were to happen, it would likely look different than the deal struck last year, the Journal reported, citing unnamed people. That said, some details were discussed last year when the proposed deal looked like it would happen. Oracle and Walmart would get a combined 20% stake in a new company called TikTok Global, which would later go public. Four of the five members on TikTok Global's board of directors would be American.
Oracle would host all US user data on its cloud platform and be tasked with "securing associated computer systems," TikTok said in a statement at the time.
"We are a hundred percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok's American users, and users throughout the world," Oracle CEO Safra Catz said in a statement.
Watch this: TikTok-Oracle deal approved, temporary block on WeChat ban
TikTok Global would likely create 25,000 US jobs as part of an expansion of its global headquarters, which would remain in the US. TikTok Global would pay more than $5 billion in new tax dollars to the US Treasury, according to Walmart. It would also create an educational program to "develop and deliver an AI-driven online
curriculum" that includes courses in math, reading, science, history and computer engineering for children.
Does that mean ByteDance owns 80% of TikTok Global?
There's confusion over how big a role ByteDance would play in TikTok Global. ByteDance says it would have an 80% stake in TikTok Global before the new company goes public.
But Ken Glueck, Oracle executive vice president, said in a statement that "upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global."
TikTok has been experimenting with e-commerce features. Last year, the company started letting some users add links to e-commerce sites so people can buy products shown in videos.
Walmart said it would "bring its omnichannel retail capabilities including its Walmart.com assortment, eCommerce marketplace, fulfillment, payment and measurement-as-a-service advertising service" to TikTok.
Would the Chinese government approve of the TikTok-Oracle deal?
"Based on what I know, Beijing won't approve current agreement between ByteDance, TikTok's parent company, and Oracle, Walmart, because the agreement would endanger China's national security, interests and dignity," tweeted Hu Xijin, editor-in-chief of the Global Times. The tabloid is backed by China's Communist Party.