Larry Ellison May Not Get TikTok After All
ByteDance had agreed to create a new and independent company called TikTok Global which Oracle would run.
Remember back in September when TikTok and Larry Ellison’s Oracle looked like they had sealed the deal for Oracle to buy a new company which would control TikTok’s American operations? Well that may not happen now and the proposed new company may never even see the light of day.
There are many reasons for this. First is former Vice President Joe Biden’s victory in the American Presidential elections last week. Joe Biden is expected to take a less hostile approach than President Trump Vis a Vis US Chinese relations.
This matters because the only reason that the video company was looking for an American partner was because the Trump Administration ordered it to cease its operations in the U.S. due to its Chinese ownership.
The President cited national security concerns, claiming that TikTok could somehow be used to spy on American interests. But it is not clear exactly how.
In August President Trump issued executive orders requiring both TikTok and fellow Chinese owned app WeChat be banned from US platforms within 45 days.
So TikTok’s Chinese parent company ByteDance agreed to create a new and independent company called TikTok Global which Oracle, together with Walmart, would own and operate. In this way the Trump Administration would not need to be concerned about the Chinese government somehow using TikTok to spy on America.
President Trump then gave his blessing to the deal.
But that deal was never finalized and the President gave TikTok just 90 days to make the sale. The deadline for the deal to be signed is November 12 and no extension has been given.
Now ByteDance has filed papers asking the Federal Appeals Court for the District of Columbia vacate President Trump’s divestment order on the grounds that it violated the company’s constitutional rights.
“In the nearly two months since the President gave his preliminary approval to our proposal to satisfy those concerns, we have offered detailed solutions to finalize that agreement,” TikTok said in a statement.
“Today, with the November 12 CFIUS deadline imminent and without an extension in hand, we have no choice but to file a petition in court to defend our rights and those of our more than 1,500 employees in the US.”
It does not seem to matter if the courts ever rule in favor of ByteDance. The company clearly only needs to buy time until after Joe Biden is inaugurated the 46th President of the United States on January 20, 2021.
If they get a reprieve for more than 60 days with some sort of court ordered stay of the execution while it hears the case then President Trump’s order may very well be reversed by a President Biden. But if it wins its case then a sale to Oracle will also be made moot.
Either way, it would seem that Larry Ellison and his company Oracle will not be getting control over an American spin off of TikTok.