ByteDance emphasized it will remain in control of a hived-off TikTok Global business, appearing to contradict President Donald Trump’s statements about how the new entity will be directed by Americans and pay an unusual $5 billion USD fee to the US government.
TikTok’s future in the US was under threat after Trump signed an executive order against the app last month, stating that it would be banned unless it was sold by its Chinese parent company. Trump claimed that the step was necessary to deal with the “national emergency” posed by the app, explains a new report from CNBC.
The deal in concept involves Oracle and Walmart taking a combined 20 percent stake in the newly formed TikTok Global business. In a joint statement, the US companies said that TikTok Global would be responsible for “providing all TikTok services to users in US and most of the users in the rest of the world.”
They claimed TikTok Global will be an independent American company, headquartered in the US. The statement also promised that this business would create more than 25,000 new jobs in the US and pay more than $5 billion USD in new tax dollars to the US Treasury.
But the deal does not entail any transfer of algorithms and technologies, according to a statement from ByteDance on Monday. The company said Oracle can instead check the source code.
“The current plan does not involve the transfer of any algorithms and technologies. Oracle has the authority to check the source code of TikTok USA,” a ByteDance statement said.
ByteDance also contested the $5 billion USD figure that Trump said the company would pay to finance an education fund as part of the deal. It said this was an estimate of the future taxes TikTok Global might pay but the real amount would depend on the company’s growth.
The contradictory statements exemplify the competing narratives the Chinese and US sides of the deal have been telling their domestic audiences, as the agreement will have to be approved by regulators in both countries.