Bytedance said on monday that it would maintain majority ownership and control of tiktok global, contradicting statements by donald trump, oracle and walmart, after it agreed a deal with the companies to continue operating in the us.
The us president gave the tiktok deal, which would provide oracle and walmart with a combined 20 per cent stake in the new entity, his blessing after threatening to ban the short-video app over security concerns. the us commerce department also said it would delay an order to apple and google to remove the app from their us app stores to september 27, giving the companies time to finalise their agreement.
Oracle, the us technology group, and walmart, the worlds biggest bricks-and-mortar retailer, said in a joint statement at the weekend that tiktok global would be majority owned by american investors. however, while their stake combined with the equity held by longstanding us investors in bytedance might mean american investors would be the biggest financial beneficiaries, direct majority ownership and control of the business is set to remain with the chinese company.
In a statement released on jinri toutiao, bytedances chinese social media platform, the company said tiktok global would be a 100 per cent fully owned subsidiary. the company added that after raising funds ahead of a potential initial public offering, it would have an 80 per cent stake in the company.
Bytedance also said the proposal did not include the transfer of source code or technology. oracle and walmart had said that all the tiktok technology will be in possession of tiktok global but did not specify who would control it.
Bytedance once again contested the $5bn figure that mr 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 companys growth.
The contradictory statementsexemplify 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.
Bytedance needs to argue there is no transfer of technology to the us in order to appease the chinese government, which recently prohibited unlicensed exports of artificial intelligence recommendation algorithms.
But luo zhiyu, a lawyer at beijing-based jingsh law firm, said a transfer of technology from a chinese company to a business under the jurisdiction of us law would count as an export, and would still need to go through technology export procedures.
Bytedance also said oracle had the right to conduct security inspections on tiktoks us source code.
The company did not specify how oracle could carry out such inspections, but said it was normal for multinationals to exhibit source code.
Bytedance also pointed to a us-china business precedent: microsofts transparency center in beijing, set up in 2016, which allows the chinese government to audit its source code. to mirror this approach, however, bytedance would have to take its source code out of the country to set up a transparency centre in the us.
Bytedances messaging was well received on chinese social media, after weeks of nationalist anger directed at founder zhang yiming. after a series of dazzling operations, trump has successfully helped tiktok go public in the us, wrote one commenter on chinese social media platform weibo.