The deal between Oracle Corporation (NYSE:ORCL) and TikTok faces rough weather because the White House expresses concern over the deal. According to a communiqué from President Donald Trump, Chinese controlling TikTok with oracle becoming a partner is not accepted as per the white house standards.
Mark Meadows, Chief of Staff at White House, said the deal is simply repacking with Chinese control. It will not go well with the original goals set by the President. The administration is reviewing the terms of the agreement.
ByteDance holds a majority stake
On Wednesday, Trump said the Beijing based company – ByteDance will hold an ownership stake in the US operations of TikTok. In a chat with reporters, Trump said he won’t like the deal. Also, some Senate Republicans and people within the White House administration have expressed concerns over ByteDance retaining a controlling stake in the US operations.
Working on a structure for Majority Control for the US
According to Wall Street Journal, the Trump administration officials are working for a mechanism to give a majority stake in a company, which acquires the US operations of the TikTok, for the investors in the US.
ByteDance agrees to data security
The officials at ByteDance gave the nod for strengthening data management and data security aspects in the proposal during a conference call on the night of Wednesday. Steven Mnuchin, Treasury Secretary, said the agreement is highly technical. It necessitated counter-proposal on security-related issues, which emerged as the significant concerns in negotiations with China’s hawks. The counter-proposal also overshadowed control and ownership issues.
The deal is facing further complications because it needs both the US authorities and Chinese authorities’ approval.
US delays banning TikTok
The US administration delayed the banning of TikTok, considering the positive developments. In a chat with reporters, Trump said he supports the agreement with ByteDance, the owner of TikTok, Walmart, and Oracle.
The department of Commerce in the US announced postponing the mobile app ban – TikTok until September 27, 2020. In the new deal, Walmart will act as the business partner, whereas Oracle is the technology partner.