The deal with TikTok and Oracle seems simple Eyewash

Within a few hours of the US Department of Commerce announcing the ban on TikTok that would prevent users from downloading TikTok apps from Apple AppStore or Google Play, US President Trump gave his blessings to the TikTok Oracle deal. ByteDance has announced the partnership with Oracle (Trusted technology partner ) and Walmart (commercial partner), raises many questions on the complete technology transfer. Earlier Microsoft got the offer on 100% transfer, whereas the present deal is without technology transfer raises many questions.

Like WeChat, TikTok filed a preliminary injection to avoid the ban that would be imposed on TikTok from coming Sunday. The move is being seen as a surprise action by TikTok that could have a negative impact on the ongoing negotiation between Trump’s administration and ByteDance owned TikTok. TikTok has accused the Trump administration of taking action for political gains in the upcoming election instead of genuine security concerns.

TikTok is seeking a hearing before the imposed ban that is scheduled to come into effect from Sunday 27th.

ByteDance has claimed that it will retain 80% of TikTok and transfer 20% to Oracle and Walmart, the ‘trusted technology partner’ and ‘commercial partner’, respectively. Contradicting the claim, Oracle has stated that after creating the new holding company TikTok Global, a majority of shares would be owned by American investors and American companies, and ByteDance will have no ownership in it.

Currently, 40% of ByteDance, the holding company of TikTok, is owned by the US investors including Sequoia Capital and General Atlantic. After the restructuring of TikTok, the US investors will be entitled to own 40% of TikTok Global and 40% of ByteDance which will continue to own and operate China-centric apps Douyin, – a short video social service targeting the Chinese market, Toutiao, and others.

Besides, as per the partnership agreement, Oracle will own 12.5% of TikTok Global while Walmart will control 7.5%.

Altogether the US-based companies and investors will have 60% of TikTok Global, leaving a minority share of 40% for ByteDance and other Chinese stakeholders.

This raises the question, if ByteDance claims to own 80% of TikTok, how come the Americans have a cushion big enough to claim 60% of the same company?

The constant contradicting statements coming from all the parties involved have left experts, media and many others wondering about the real action and game plan agreed between the parties. At one side Donald Trump approves the deal, on the other side his own administration imposes the ban. And now, TikTok, which is yet to get approval from China, is apparently rubbing the Trump administration on the wrong side by challenging them in court.

The ambiguity among all the future partners has started killing the excitement and raising doubts about the whole agreement.