UPDATED: A deal that would give Oracle and Walmart ownership stakes in TikTok is up in the air — and may not happen at all, as the Biden administration reviews Trump’s actions and policies against Chinese tech companies.
Last August, then-President Trump ordered Chinese internet giant ByteDance to sell TikTok to U.S. entities, citing alleged risks to national security from the hugely popular short-form video app. Under the threat of TikTok’s shutdown in the U.S., ByteDance reached a tentative deal with Oracle and Walmart, which under the proposed terms would acquire a combined 20% stake in TikTok.
Now that Trump is gone from the White House — and his order requiring ByteDance to divest TikTok to American investors is pending a court challenge — the TikTok-Oracle-Walmart deal has been “shelved indefinitely,” the Wall Street Journal reported.
TikTok and Walmart declined to comment. Oracle didn’t respond to a request for comment.
In a filing Wednesday with the D.C. Circuit Court of Appeals, the Biden administration’s Justice Department formally requested that the court put TikTok’s litigation against the U.S. government over the divestment order on hold.
“As the Biden Administration has taken office, the Department of Commerce has begun a review of certain recently issued agency actions, including the Secretary’s prohibitions regarding the TikTok mobile application at issue in this appeal,” the filing reads in part. “In relation to those prohibitions, the Department plans to conduct an evaluation of the underlying record justifying those prohibitions.”
The DOJ’s motion added, “The Department of Commerce remains committed to a robust defense of national security as well as ensuring the viability of our economy and preserving individual rights and data privacy.”
Discussions between TikTok and the Committee on Foreign Investment in the U.S. (CFIUS), which has the authority to block foreign investments involving U.S.-based entities, have continued. One potential solution to address worries over the Chinese government’s access to TikTok user data would involve having a “trusted third party” manage TikTok’s data — a step that wouldn’t require a sale, according to the WSJ report.
Federal courts have ruled that Trump overstepped his authority in ordering TikTok to shut down, finding the administration’s hypothetical concerns about TikTok’s security risks unconvincing.
At this point, it’s unknown whether the Biden administration will try to enforce previous administration’s divestiture order involving TikTok or seek some other way forward. Any sale giving U.S. companies control over TikTok would require approval from the Chinese Communist Party, which has signaled opposition to any such deal.
It’s worth noting that Biden’s presidential campaign was itself wary about potential data privacy issues with TikTok: Last year, the campaign instructed staff to delete the TikTok app from their phones over security concerns.