The tentative deal that would have Oracle and Walmart acquiring Chinese app company TikTok apparently is more tentative than expected as involved parties disagreed about supposedly agreed-upon terms.
The Trump administration said it would ban TikTok from operating in the US because of national security concerns about how China might use data gleaned from TikTok users. Then only way to avoid an outright ban would be to sell US operations.
Microsoft and Walmart then submitted a bid to acquire the company, competing with Oracle.
Oracle won, and then Walmart got on board, looking to take advantage of TikTik's young user base to generate third-party marketplace sales and ad dollars.
This is where things got confusing. Oracle was going to take a 12.5 percent stake, Walmart a 7.5 percent stake, and TikTok's parent company, ByteDance, said it would retain the balance of ownership until a planned IPO. However, it argued that because ByteDance is majority-owned by US investors, the deal would meet US requirements.
After first saying that it would bless the deal, and that the parties involved had agreed to put $5 billion into a US government-administered education fund of some sort (an agreement that ByteDance said was not true), the Trump administration now is saying that it will not allow the deal to go forward if there is any Chinese ownership.
The New York Times reports that "Oracle said on Monday that as soon as the new company, TikTok Global, was created, ByteDance would lose its ownership stake in the service." Which also was at odds with what ByteDance said was its understanding of the deal.
And, the Times adds, "China could also scuttle the deal, which has become the latest front in a larger battle over whether the United States or China will control the internet."
- KC's View:
You wouldn't think that it would be so hard to come to a deal understanding, or to write things down so that everybody is working from the same draft. Unless what we have here is more political posturing and less business negotiation.
To be honest, I'm still having trouble understanding why TikTok is more of a national security threat than hundreds of other apps and e-commerce sites from all over the world that accumulate data.