In case you have not been keeping up with the drama around video-sharing app TikTok, the app has found a lifeline for its time in the U.S. by partnering with U.S. firms Oracle and Walmart. While TikTok has had major success over the summer and has grown into a massive global craze, the company has come under fire for fear that the data collected on its massive user-base may be handed over to China’s ruling Communist Party, as TikTok is owned by the Chinese firm ByteDance.
If TikTok did nothing to address the privacy concerns stemming from their possible association with the Chinese Communist Party, U.S. security officials were prepared to shut-down app downloads in the U.S. TikTok, along with Walmart and Oracle, an American computer technology firm, have assembled a new corporate structure which President Trump said has his blessing, effectively allowing the app to continue in the U.S.
The deal is an interesting transition of TikTok from a company completely operated by ByteDance to one that is mostly an American company. ByteDance will be incorporating (possibly in Texas) a new firm headquartered in the U.S. called TikTok Global, which will be significantly owned by Walmart and Oracle, each owning 7.5% and 12.5%, respectively. While ByteDance will retain a share of the U.S. operation, TikTok Global is expected to be majority-owned by Americans.
The new company will have a board of directors made up of a majority of Americans, a U.S. Chief Executive Officer and a security expert on the board. This new setup for TikTok falls short of President Trump’s desire for ByteDance to sell the entire U.S. operation to an American firm. However, this compromise allows the 100 million users in the U.S. to continue using the popular app while generating approximately $5 billion in tax revenue and creating around 25,000 new jobs.
