ByteDance now has until December 4 to divest its operations in the United States (US), after an earlier deadline was extended by a week, CNN reported. This essentially means that ByteDance will have to finalise a deal for TikTok with an American company by the deadline, in order to avoid a ban on the popular short video app.
ByteDance was granted the extension as the US’ Committee on Foreign Investment in the United States (CFIUS), is currently reviewing a revised submission made by the company, the report said. This is the second such extension offered to the company, after a previous deadline of November 12 was shifted to November 27. Earlier in the month, ByteDance had asked a Federal Court of Appeals to revoke the Trump administration’s divestment order against the company.
Key background: On August 6, Donald Trump signed an executive order banning US transactions with Bytedance over national security concerns, and the order was to initially come into effect on September 20. However, on September 19, a tentative deal was signed between TikTok, Oracle and Walmart, which will result in the creation of a new entity called TikTok Global, wherein Oracle and Walmart will own a 20% stake together.
In response to the August 6 executive order, Tiktok filed a lawsuit against the Trump administration, arguing that the executive order was a “gross misappropriation” of the International Emergency Economic Powers Act (IEEPA) and a “pretext for furthering the President’s broader campaign of anti-China rhetoric in the run-up to the U.S. election”. TikTok also said that the August 6 order failed to follow due process and act in good faith, neither providing evidence that TikTok was an actual threat, nor justification for its punitive actions.
It is worth mentioning that the divestment order has been issued by Trump, who lost his re-election bid to the White House earlier this month. The stance of President-elect Joe Biden on TikTok, who is set to replace Trump, is currently unknown.
TikTok, Oracle, Walmart in the middle of a complicated deal
On September 19, it seemed as if TikTok’s future in the US was somewhat secured after Oracle and Walmart announced that they will pick up a 20% stake in TikTok Global, which will provide TikTok services to users in the US and “most of the users in the rest of the world”. Trump even gave this deal his “blessing” and had “approved the deal in concept.” Oracle will acquire 12.5% of the short video app, whereas Walmart will pick up a 7.5% stake. As part of the proposed Sdeal, Oracle will become TikTok’s “secure cloud provider” and will combine its secure cloud technology with “continuous code reviews, monitoring, and auditing” to keep US users’ data safe. Walmart, on the other hand, is looking to boost its marketplace and ad business through the deal.
However, that was until ByteDance said that it will own 80% of TikTok Global. Following ByteDance’s announcement, Trump threatened the deal will not be approved if ByteDance retains control of the company. Oracle, too, hit out at the company, claiming that ByteDance will have no ownership of TikTok Global. “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,” Oracle had said at the time.
Also read:
- Trump, Oracle push back after ByteDance claims it will retain control of TikTok Global
- Oracle and Walmart will acquire a 20% stake in TikTok
- Trump signs executive order banning US business with TikTok and WeChat
- TikTok sues Trump administration over ‘unconstitutional’ app ban
