Photo Courtesy of Search Engine Journal
A deal between software company Oracle and department store Walmart came late Saturday, Sept. 19, just hours before TikTok was supposed to be taken off the App Store in the United States.
In early July, officials in the Trump administration announced that they were planning a ban on TikTok, which has risen in popularity since its introduction in 2018. The announcement came shortly after TikTok users utilized the app to encourage others to register online for Trump’s rally in Tulsa, Oklahoma, so that the rally would have more reserved spots than attendees.
The popular short video app is owned by ByteDance, which is a Chinese technology company. Shortly after TikTok’s introduction in 2018, the U.S. government launched an investigation to determine whether the app posed a risk to national security. The main concern was centered around a worry that the Chinese government could be collecting American citizens’ data. However, TikTok has reported that it does not collect any more data from its users than competing social media apps such as Facebook, Instagram or Google. According to their privacy policy, they do not sell personal information to third parties.
In order to satisfy these privacy and national security concerns, Oracle was chosen to be the “trusted technology provider” for TikTok. The hope was that an American company buying stake in TikTok would help to ease concerns over Chinese ownership of TikTok. Oracle was chosen as the winner of the deal on Sunday, Sept. 13, but there was still speculation that TikTok would be taken off of the App Store on the following Sunday, Sept. 20. The order for Sept. 20 would halt all downloads of the app from the App Store and stop users with existing accounts from receiving updates on the app. Hours before this deal was supposed to take effect, Oracle signed the deal with Walmart, giving the companies a combined 20% stake in a new company called TikTok Global.
Although ByteDance will still own 80% of TikTok Global, four out of the five new board members will be American citizens and Oracle will become the new cloud provider for TikTok. The company will also have the ability to oversee the app’s source code. TikTok Global is set to provide an estimated 25,000 new jobs for Americans.
On Saturday, Sept. 19, Trump voiced his approval of the deal. “I have given the deal my blessing,” he told reporters in a press release. “If they get it done, that’s great. If they don’t, that’s okay too.”
At the moment, TikTok’s algorithm is still owned by ByteDance, along with 80% of the new company TikTok Global. Because ByteDance still holds the majority stake in TikTok, it is not entirely clear what the future of the app is, especially given that the deal did not hit all the points Trump initially asked for. What remains clear, however, is that TikTok will remain available to U.S. users thanks to the joint ownership deal between Oracle, Walmart and ByteDance.
