An editorial Wednesday in China Daily, a state-run newspaper of the Beijing regime, called the agreement to form TikTok Global — which was forced by an executive order by President Trump under the guise of protecting U.S. national security — was “dirty and unfair and based on bullying and extortion.”
“China has no reason to give the green light to such a deal, which is dirty and unfair and based on bullying and extortion,” the China Daily editorial says. “If the U.S. gets its way, it will continue to do the same with other foreign companies. Giving in to the unreasonable demands of the U.S. would mean the doom of the Chinese company ByteDance.”
The Trump administration has given ByteDance a Nov. 12 deadline to sell the TikTok U.S. operations to majority American ownership; otherwise, the U.S. government will proceed with a full ban on TikTok.
ByteDance, Oracle, Walmart and ByteDance’s investors believed they had struck a pact for TikTok Global — reportedly valuing the app company at up to $60 billion — that would satisfy both the U.S. and Chinese governments. The new U.S.-based TikTok Global would “pay more than $5 billion in new tax dollars to the U.S. Treasury,” according to an Oracle-Walmart joint statement. The company’s security and user data would be overseen by Oracle and the app would run on its cloud infrastructure.
That agreement received Trump’s “blessing” last week. But there’s a possibility the deal won’t go through.
ByteDance and Oracle are spinning different narratives over the terms of the ownership of TikTok Global. and the On Sunday, ByteDance said it would own 80% of TikTok Global, with Oracle and Walmart collectively taking a 20% stake. But Oracle on Monday said “ByteDance will have no ownership in TikTok Global” when it is created and that Americans would have majority ownership.
Trump, on Fox News’ “Fox & Friends” Monday, suggested he would kill the deal “if we find that [Oracle doesn’t] have total control.” Trump said that ByteDance would “have nothing to do with [TikTok], and if they do, we just won’t make the deal.”
In its editorial, China Daily compared Trump’s forcing ByteDance to divest U.S. operations to mob tactics. “What the United States has done to TikTok is almost the same as a gangster forcing an unreasonable and unfair business deal on a legitimate company,” says the paper’s editorial, titled “No disguising proposed TikTok deal is a dirty and underhanded trick.”
TikTok Global will have four American citizens on its five-member board of directors, according to a joint statement from Oracle and Walmart. The New York Times reported that ByteDance founder and CEO Zhang Yiming will be the only non-U.S. board member, alongside Walmart chief Doug McMillon, General Atlantic’s William Ford, Susquehanna’s Arthur Dantchik and Sequoia’s Douglas Leone.
On Wednesday, Fox Business’ Maria Bartiromo reported that Oracle CEO Larry Ellison — a Trump supporter and fundraiser — told her that along with the four American board members of TikTok Global, the fifth “is going to be likely Japanese,” identifying Masayoshi Son, CEO of SoftBank Group (which is an investor in ByteDance).
TikTok says it has 100 million U.S. users of the app, which is popular among teens and young adults for sharing lip-syncing, dance and other short-form videos.
“The success TikTok has achieved… has apparently made Washington feel uneasy, and it has used national security as the pretext to ban the short video sharing app,” China Daily said in the editorial. “National security has become the weapon of choice for the Washington when it wants to curb the rise of any companies from foreign countries that are out-performing their U.S. peers.”
ByteDance will continue to maintain control over the AI algorithms that power the TikTok app’s video recommendations (and which ByteDance uses for the similar Douyin app, available in China).
China Daily said that, with Oracle given the authority to check the source code of TikTok’s app, that would unfairly give the U.S. information about ByteDance’s Douyin as well. “ByteDance therefore stands to lose not only control of the company, but also its core technology that it has created and owns. That would be detrimental to the long-term development of the company,” the paper’s editorial says.
Over the weekend, TikTok got a one-week reprieve of the Commerce Department’s ban on downloads of the social video app until next Sunday, Sept. 27, citing President Trump’s provisional approval of ByteDance’s deal.