Other than the role of ByteDance in the new company’s future, other issues appear unsettled. According to Trump, the deal will include a US$5 billion education fund paid to the US Treasury. In response, ByteDance said the fund is not part of the deal, but rather a projection of income tax and other fees the new company would pay over the years.
More importantly, there is uncertainty about the role of the Chinese government in the potential deal. On August 28, China’s Ministry of Commerce released an updated export control list to include technologies such as personalized information push services based on data analysis. The move is widely considered a response to Trump’s ban on TikTok and the reported negotiations between ByteDance and potential US buyers.
In a widely cited commentary, Professor Shen Yi, a political scientist at the Shanghai-based Fudan University, wrote “The Chinese government officially entered the game surrounding TikTok,” also saying that vying for control of TikTok has become a battleground for the US and China.
After the deal was announced, State-run newspaper the Global Times published an editorial on September 21 saying that China will say “no” to the US “robbery” of TikTok. Made under coercion, the deal reflects “Washington's bullying style and hooligan logic” and that “China will not accept this kind of bullied arrangement by the US,” the editorial read.
“It [TikTok] will be targeted by the US and turned into a US-controlled company via trickery and coercion, which eventually serves only US interests,” it read.
It remains unclear whether and when the deal will be subject to the approval of the Chinese government. According to Trump, the deal has “nothing to do with China.” But many think otherwise.
ByteDance claimed that the deal does not involve transfers of algorithms and technology to Oracle. But confusingly, the company filed requests for export of certain technologies with Chinese authorities. China’s Ministry of Commerce acknowledged the filing on September 24, saying it would be assessed “in accordance to relevant regulations.”
Some believe the contradictory claims on the basics of the deal between ByteDance and Oracle reflect the gap between the two governments, rather than the two companies. A separate commentary published in the Global Times on September 26 said the deal “goes way beyond just a mafia-style robbery of a lucrative Chinese business and cutting-edge technologies,” and poses a threat to Chinese national security. “The US could find loopholes in those technologies to launch cyber and other attacks on China and other countries to preserve its hegemony,” said the article, suggesting that the Chinese government will not approve the deal unless ByteDance remains in control.
Following the recent court ruling, the US Justice Department vowed that it will defend Trump’s order. ByteDance and Oracle have refused to comment on the status of the deal.
As Trump shifted his focus to his Supreme court nominee, re-election campaign and Covid-19 diagnosis, the fate of TikTok became a lower priority on Washington’s political agenda. With the presidential election only a month away, TikTok’s deal is very likely to slip past the election.
In the meantime, TikTok’s popularity continues to grow. According to a report released by investment bank Piper Sandler on October 6, TikTok surpassed Instagram as teenagers’ second-favorite social media app with 29 percent of US teens picking it as their favorite social app, trailing only Snapchat’s 34 percent.
But with so many unanswered questions, the confusing geopolitical soap opera surrounding TikTok may soon get even more dramatic.