US President Donald Trump on Thursday signed an executive order to advance a deal on the TikTok App in the United States with a group of primarily American investors. The move further puts the influential app, with 170 million US users, into the hands of some of Trump’s wealthiest allies.
The deal would allow the video-sharing app to remain online in the US after a law passed last year by a bipartisan majority of Congress, which required the Chinese tech giant ByteDance to either sell the app or have it banned nationwide. Over the years, US federal officials had warned that the Chinese government could use the app to harvest Americans’ data or secretly shape the videos they watch.
Trump’s executive order, signed on Thursday, postponed the effective date of the rule for 120 days while negotiators work on finalizing the deal. This marked the Trump administration’s fifth postponement of the law’s implementation in the country.
The executive order was signed amid growing criticism that Trump lacked the authority to overturn a law upheld by the Supreme Court unilaterally.
Trump’s hopes for a TikTok deal
While speaking to the reporters at the Oval Office, the American leader said that the company would be in the hands of “very sophisticated … ingenious” Americans and that Chinese President Xi Jinping had given the deal “the go-ahead.” When asked if the new company could change the video recommendations to be more positive towards the current administration, Trump said that ‘it is not going to happen’.
“If I could, I’d make it 100 per cent MAGA-related. But it’s not going to work out that way, unfortunately … every group, every philosophy, every policy will be treated very fairly,” he said. Asked if the US government would get a payout for its involvement in the negotiations, Trump said the US “comes out great” in the deal.
Under the deal pushed by the Trump administration, some of the new TikTok US will be owned by corporate interests linked to men known for their longtime support of Trump and the Republican Party, such as Jeff Yass, a co-founder of Susquehanna International Group, and Larry Ellison, a co-founder of Oracle, The Washington Post reported.
A consortium of investors, including Oracle, the private equity giant Silver Lake, and the Emirati state-owned investment firm MGX, will evenly split a 45 percent stake in the new company. Meanwhile, ByteDance will own just 20 per cent of the app in the US. However, the deal cannot be finalised without Chinese approval, and many of the details of the new operation have not been disclosed.
It is also unclear who will lead the new company and when the corporate transition will occur. However, many believe that the deal could face legal challenges, with some members of Congress arguing that the proposed transfer of ownership does not sufficiently comply with the law.
According to the proposed deal, ByteDance will still hold a stake and retain ownership of its recommendation algorithm, despite the company’s control of the powerful software being one of the central concerns that led to the law’s passage. The new version of the app will launch in the US with similar functionality, allowing users to continue seeing and sharing videos from around the world. At the same time, overseas viewers will be able to see the American content.
