TikTok and WeChat Manage to Circumvent the U.S Ban — for now
TikTok has a new date with the Commerce Department, while WeChat's future in the U.S. is still uncertain
After Trump’s executive orders issued in August, TikTok and WeChat, were to cease U.S. operations on Sunday. However, the two have managed to continue operating in the U.S. for now.
Starting with WeChat, a judge ordered an injunction against the August executive orders. “Certainly the government’s overarching national-security interest is significant,” but “has put in scant evidence that its effective ban of WeChat for all U.S. users addresses those concerns,” a judge wrote. WeChat ban was also ruled out as a free speech violation.
For TikTok, the app secured a last-minute deal that averted the imminent Sunday night ban in the U.S.
As part of the agreement, TikTok, owned by Chinese tech giant ByteDance, will form a new separate entity headquartered in the U.S. called TikTok Global. TikTok Global will be listed as a public company in the U.S. stock exchange through an IPO. TikTok Global will create a total of 25,000 jobs in the U.S.
Still, ByteDance will hold the majority stake in the new company, thus retaining its control. Oracle’s primary function is to host all of TikTok’s U.S. data “to ensure U.S. national security requirements are fully satisfied,” TikTok said.
At the same time, Oracle will also own a stake in TikTok Global. In total, Walmart and Oracle will hold a 20 percent stake in the entity, while TikTok’s parent company will be in control of the remainder.
It’s interesting to see Walmart part of the deal, as the e-commerce company previously backed Microsoft in the TikTok acquisition pursuit.
The new deal is still miles away from original demands from the Trump government.
The two apps are still at risk, despite the WeChat’s recent victory and TikTok’s late-minute deal. The U.S. commerce department has given TikTok a 7-day reprieve – TikTok will now be banned on 27th September this month.
For its Chinese counterpart, WeChat, the future is even more uncertain. The Trump administration issued executive orders to ban TikTok and WeChat in the U.S. over national security and censorship.
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