ByteDance faces big hurdles over TikTok
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ByteDance is trying to convince the White House to allow it retain majority ownership of its popular app TikTok in the U.S. But regulatory lawyers and former national security officials say the Chinese company faces two major hurdles.
First, for U.S. President Donald Trump to bless the deal, he would have to amend the executive order he just signed last month. That order directed ByteDance to divest TikTok’s U.S. operations. Government experts say no president has ever done that when it comes to national security reviews. No parties have ever negotiated a solution short of a divestment.
Trump had ordered the sale of the U.S. unit amid concerns that TikTok could pass American user data to the Chinese government. On Wednesday, he said he did not favor the idea of TikTok’s U.S. operations remaining under Chinese control.
“We’re looking into that from the standpoint of ByteDance. We don’t like that. I mean, just conceptually, I can tell you I don’t like that.”
Second, ByteDance is discussing offering a minority stake in TikTok to Oracle, and it plans to have the American database software giant manage its user data and ring fence that from China. But the U.S. government panel known as CFIUS that reviews foreign deals typically requires an independent party to oversee security arrangements.
Under the proposed deal, ByteDance refers to Oracle as a “trusted technology partner,” but CFIUS previously rejected use of such partners in considering whether ByteDance should divest TikTok. Oracle, ByteDance, the White House and the Treasury did not respond to requests for comment.
The clock is ticking on TikTok. Trump has threatened to ban the app in the U.S. as early as Sunday if its owner fails to comply.
