The Trump administration's prospects for bans on Chinese social apps TikTok and WeChat appear to be shelved for now. The shutdowns that were supposed to commence today —as mandated by executive orders signed in August — have been delayed.
In the case of TikTok, the video-sharing platform announced yesterday that it has secured plans to sell a 20% stake that will be shared between Oracle and Walmart before going public as a U.S.-based company.
A source tells CNBC's Alex Sherman that with the investor makeup of ByteDance, TikTok should end up with a 53% U.S. ownership.
So the ownership of TikTok Global will be, according to a person familiar with the matter:
Oracle - 12.5%
Walmart - 7.5%
ByteDance - 80% ...
But 40% of ByteDance’s ownership is US venture capital funding. That’s how the Trump admin is calculating this deal as “majority US $”
— Alex Sherman (@sherman4949) September 20, 2020
It's interesting to note that Walmart initially backed Microsoft's bid to purchase TikTok before ByteDance roundly rejected the offer.
The new corporation plans on establishing its headquarters in the U.S. with up to 25,000 jobs promised around the country and is also using Oracle to host its content.
Shortly after the news went out, the Commerce Department has granted a week's stay of prohibition. TikTok will now shut down on September 27, barring the closure of the spin-off.
WeChat has been saved by a court injunction on the ban. A Californian judge agreed with a group of plaintiffs who use the messaging app in the U.S. who said that the prohibition order would chill their First Amendment rights. The White House has not said whether it will appeal the decision.
TikTok, formerly U.S.-based Musical.ly, was bought out by ByteDance in 2017. The Committee on Foreign Investment in the United States did not flag the transaction at the time, but it was only last year that regulators began scrutinizing the app on concerns of censorship and data privacy. President Donald Trump openly expressed his motivation to ban the app about a month after younger users began leveraging it to run political campaigns against him such as organizing a mass order of tickets for an election rally in Tulsa, Oklahoma, then not attending the event (though Trump did not explicitly mention these campaigns as a reason).
WeChat, owned by megaconglomerate Tencent, was only recently rounded up into the push for the same primary reasons: national security and censorship. The app is ubiquitous in modern Chinese life for obtaining and paying for goods and services in the country as well as for private and public communications.
— Artem Russakovskii (@ArtemR) September 18, 2020
Our sister site APK Mirror, which hosts a catalogue of Android apps for users to sideload onto their devices, had plans to prevent U.S. users from downloading the two apps in compliance with the executive orders. Those plans have been backtracked for the time being, so users are free to download TikTok and WeChat at their respective pages on APK Mirror.