Chinese govt not an outsider in the TikTok deal
Published: Sep 20, 2020 12:22 PM

Photo: IC


US President Donald Trump said Saturday that he had approved Oracle Corp's bid for the US operations of TikTok "in concept," according to a Bloomberg report. The new company will be called TikTok Global, said US Secretary of the Treasury Steven Mnuchin. TikTok Global will likely be headquartered in Texas and will hire "at least" 25,000 people, Trump said. Trump also added that the new company "will have nothing to do with China" and fully controlled by Walmart and Oracle. But the last line sounded more like a deliberate explanation from Trump to the American voters.

ByteDance retains a majority of stocks in TikTok and control of the algorithm, with Oracle and other US investors holding a minority of stocks, according to the report. Oracle will have full access to TikTok's source code and updates to ensure the company's Chinese parent doesn't use a back door to monitor US users, informed source said.

According to the report, the current plan will allow TikTok to continue operating in the US, prevent it from being shut down, and does not require a full sale to the US as originally demanded. Its parent company, ByteDance, did not get out of the game. US companies like Oracle will own only part of TikTok, while ByteDance will still continue as the controlling shareholder with the core algorithms remaining in its hand. The new company, with mostly American personnel, will run TikTok and oversee its security.

Oracle will become TikTok's partner in data security compliance, ByteDance told the Global Times early on Sunday. The two sides will carry out data security compliance cooperation similar to that between the iCloud and the Guizhou-Cloud Big Data Industry Development Company in China. Since TikTok has an office in Los Angeles, California, the deal is also dubbed "California Cloud Big Data." TikTok will continue to set the US as its headquarters, and the team will continue to expand, creating 25,000 new jobs as the business grows. It will also associate with other companies to donate $5 billion to an education foundation to improve global education through technology and online video.

Though still unfair, I think the new plan reported by the US media would be less costly for ByteDance than a shutdown or a complete sale to US companies. This plan is relatively more reasonable to ByteDance. The plan shows that ByteDance's moves to defend its legitimate rights have to some extent worked. The Chinese government's latest restrictions on technology exports, including AI algorithms, have also influenced how the things are going.

In my opinion, the case of TikTok should not have happened in the first place. It should have been allowed to continue operating normally in the US, and any adjustment would be an intrusion on ByteDance's rights. However, the new plan avoids the worst scenario, and ByteDance will be able to retain some of its key interests. This can be seen as a result of the struggle. 

As a Chinese media professional, and from the perspective of reality, I would like to see a final plan reached through further coordination with all parties. US media reports said the plan would need to be approved by the Chinese government. I think this is a must. Any resolution that finally addresses the controversy will definitely need to be accepted by the company, the US government and the Chinese government. The Chinese government has never been an outsider from the beginning to the end of this deal. Washington cannot unilaterally get whatever it wants. 

The author is editor-in-chief of the Global Times. opinion@globaltimes.com.cn