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TikTok’s deal with Oracle and Walmart on hold as Joe Biden’s government reviews data concerns

By | Published on Friday 12 February 2021


The plan to sell a slice of the TikTok global company to American firms Oracle and Walmart could be abandoned because of the change at the top of the US government. Reports that the Oracle/Walmart deal could be dropped came as the US Justice Department asked a court to pause ongoing legal wrangling over former President Donald Trump’s executive orders banning TikTok and its Chinese owner Bytedance from operating in America.

Trump, of course, banned Americans from “transacting” with Bytedance and ordered the Chinese firm to sell off any US-based assets via two executive orders last summer. The orders were seen as part of Trump’s efforts to seem tough on China ahead of last year’s Presidential election, although they were justified by concerns that had been expressed about the TikTok platform on both sides of the political divide.

Those concerns relate to whether or not the Chinese government has access to TikTok’s global userbase and user data, because Bytedance is a China-based company. For its part, Bytedance has insisted those concerns are unfounded, and sought to reassure law-makers of that fact.

However, once Trump added TikTok to his ‘tough on China’ target list, Bytedance also tried to placate the US government by getting American companies involved in its global business, especially on the data management side. Hence the deal with Oracle and Walmart.

It remained unclear whether that deal was sufficient to placate Team Trump, with the President in particular suggesting that he wanted a complete sale of TikTok US to American investors, alongside some kickback for the US taxpayer.

With Trump’s executive orders set to come into effect in September and November – and with government approval of the Oracle/Walmart deals far from certain – TikTok also got its lawyers on the case, securing injunctions putting on hold any actual ban against the video-sharing app.

That was based on the argument that the legal powers cited by Trump in his executive orders had limitations when it came to “personal communications” and the sharing of “informational materials”.

The US Justice Department was busy appealing those injunctions. And it is those appeals that government officials asked to put on hold this week. That’s because, with President Joe Biden now in charge, a new review is underway to assess whether the data concerns about TikTok are actually justified.

With that review in action, the Wall Street Journal cites sources as saying Bytedance has now shelved its plan to sell a slice of TikTok to Oracle and Walmart, on the off chance the Biden team are satisfied that the Chinese company is already sufficiently protecting the data of US citizens, and therefore Trump’s executive orders from last year can be officially cancelled.