China’s Bytedance Says It Will Own 80% of TikTok GlobalSeptember 21, 2020
Shortly after President Donald Trump “gave his blessing” to TikTok’s U.S. sale, he claimed the deal completely addresses his administration’s national security concerns and “has nothing to do with China.” However, a new statement released by Bytedance, the Chinese startup that owns TikTok, (via CNBC) appears to contradict Trump’s claims.
Bytedance says it will retain a substantial 80 percent stake in TikTok Global, a new subsidiary of the video app for the U.S. market in which both Oracle and Walmart will also be minority holders.
“It’ll be a brand new company. It will have nothing to do with any outside land, any outside country, it will have nothing to do with China,” Trump said, pronouncing the agreement a success on Saturday, 19th September.
Plus, Bytedance’s founder and CEO, Zhang Yiming will be included in the border of directors of TikTok Global — alongside other members such as the CEO of Walmart.
A day later on Sunday, 20th September, Secretary of State, Michael R. Pompeo, in an interview, claimed the new TikTok subsidiary will be “controlled by Americans” and Bytedance will remain a “passive shareholder” with “no access to the company, no decision-making authority” and without the “ability to peer into what they’re doing.”
Bytedance’s latest statement also sheds light on previously fuzzy aspects of the deal. It added that the $5 billion figure Trump quoted that TikTok will have to pay in “new tax dollars to the U.S. Treasury” is merely a “forecast” of corporate taxes and the exact amount will be determined based on TikTok Global’s development.
As rumored earlier, Bytedance won’t be sharing its algorithms and recommendation engine — that powers the TikTok feed – with Oracle. Instead, in the statement, it said Oracle will have the authority to conduct security checks on TikTok’s source code in the United States. Examining the source code of any digital service is a common practice for reviewing its security and data privacy protections. Last month, in an 11th-hour twist, China updated its list of technologies that are subject to export restrictions to add “recommendation of personalized information services based on data.”
We’ve reached out to Bytedance and the Trump Administration for further comment and we’ll update the story when we hear back.