ByteDance is awaiting approval of the TikTok deal by Chinese authorities
|The preliminary terms of the deal for TikTok's us business, discussed since last weekend, are interpreted differently by the parties, which means that the deal itself is still in question. ByteDance is still hoping to get the deal approved by the Chinese authorities, and at the same time asks the US judicial authorities to prevent the ban on downloading the app, which will take effect this Sunday. |
It becomes obvious that the Chinese side does not really expect to conclude a deal in a short time. As explained by Reuters, the preliminary conditions, taking into account the comments of the relevant American Committee, were prepared over the weekend in a great hurry, and the parties were literally forced to judge the structure of the deal on the draft version of a 20-page document with comments from the regulatory body, which was not given enough time to study. This explains why the American and Chinese sides interpret the terms of the deal in their own way.
Recall that in the representation of ByteDance, it will receive control of 80% of shares in TikTok Global, another 12.5% will go to the American Corporation Oracle, and the remaining 7.5% will be received by the Walmart retail chain. A "trusted technology partner" represented by Oracle will be able to store data from American TikTok users on its servers, and will also inspect software code updates for the presence of "bookmarks" that theoretically allow Chinese developers to access this data. ByteDance expects To retain control of the key TikTok recommendation algorithm. Now the developer of the service is waiting for approval of the transaction from the Chinese regulatory authorities, for which it has already submitted a corresponding application.
Chinese media have already thrown a real tantrum about the terms of the deal in the presentation of American TikTok investors, calling everything that is happening a vivid illustration of Washington's policy aimed at eliminating competitors in the technology sector. It is difficult to say how much these sentiments are shared by the Chinese authorities, since the latter have so far been very cautious in their statements on related issues.
American TikTok investors, who own 41 % of ByteDance itself, are the mainstay of the US authorities in an effort to remove the service from Chinese control. If you take into account the shares of Oracle and Walmart that they will receive in the capital of TikTok Global, then us investors will control at least 53 % of the business of the newly created company. ByteDance does not share this approach to determining the capital structure, and this is the main contradiction with the American side. Adding fuel to the fire is President Donald trump, who in an interview with a popular American TV channel said that he would not approve the deal with TikTok if under its terms Oracle does not get full control over the service in the United States.
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