TikTok users in the U.S. got a one-week reprieve from the Trump administration’s download ban on the popular short-form video app.
The announcement of the postponement of the ban came after President Trump said he gave his “blessing” to a multiparty deal under which TikTok will become majority-owned by a group of U.S. companies and investors: Oracle and Walmart, which together will take a 20% stake, along with American investment firms Susquehanna International Group, General Atlantic, Sequoia Capital and Coatue Management.
Given the president’s approval of the TikTok pact, the U.S. Commerce Department said it has pushed back the prohibition on app stores providing access to TikTok until next Sunday, Sept. 27.
The new TikTok Global will “pay more than $5 billion in new tax dollars to the U.S. Treasury,” according to a joint statement by Oracle and Walmart. It’s unclear if that will be a one-time payment or be part of the new company’s regular course of business.
The Commerce Department announced Saturday evening, “In light of recent positive developments, Secretary of Commerce Wilbur Ross, at the direction of President Trump, will delay the prohibition of identified transactions pursuant to Executive Order 13942, related to the TikTok mobile application that would have been effective on Sunday, September 20, 2020, until September 27, 2020 at 11:59 p.m.”
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TikTok late Friday had filed a lawsuit seeking a temporary order to block the ban. Free-speech advocates blasted the Trump administration’s bans on TikTok and WeChat, saying those violated the First Amendment rights of U.S. users.
The deal, involving Beijing-based ByteDance, TikTok’s parent company, still requires approval by the Chinese government. The TikTok deal requires official approval by the Committee on Foreign Investment in the United States. TikTok interim head Vanessa Pappas wrote in a blog post Saturday, “Our plan is extensive and consistent with previous CFIUS resolutions.”
Meanwhile, The U.S.’s total ban of WeChat, owned by Chinese internet giant Tencent, remains in effective for midnight ET Sunday, Sept. 20. WeChat users (unaffiliated with Tencent) were awaiting a San Francisco federal court ruling on a request seeking an emergency stay of the order.
Oracle said that all TikTok technology will be in possession of TikTok Global, which will “comply with U.S. laws and privacy regulations.”
“Data privacy for 100 million American TikTok users will be quickly established by moving all American data to Oracle’s Generation 2 Cloud data centers, the most secure cloud data centers in the world,” Oracle said. Walmart, in addition to its equity stake, will bring its “omni-channel retail capabilities including its Walmart.com assortment, ecommerce marketplace, fulfillment, payment and measurement-as-a-service advertising service.”
TikTok Global will launch an initial public offering within 12 months and be listed on a U.S. stock exchange.
“We’re pleased that today we’ve confirmed a proposal that resolves the [Trump] Administration’s security concerns and settles questions around TikTok’s future in the U.S.,” Pappas wrote in the blog post.