Jessica Goodfellow
Nov 16, 2020

TikTok granted 15-day extension for US deal

Chinese-owned short video app now has until November 27 to receive approval from US officials over its proposed deal with Oracle and Walmart.

TikTok granted 15-day extension for US deal

TikTok has been granted another extension to President Trump's executive order requiring it to sell its assets in the US, after it claimed in an appeal petition that it had received no communication from the US government for several weeks.

The ByteDance-owned short video app had originally been given a September deadline to divest its business to a US buyer before transactions with the app would be banned. The first executive order, which motioned to block TikTok's app downloads and internet traffic, was temporarily blocked by federal judges following a range of countersuits by TikTok employees and creators.

A second executive order signed by President Trump permitted it until November 12 to reach a deal that satisfied the US government's concerns over the safety and security of the app, primarily related to its Chinese ownership.

TikTok owner ByteDance reached a provisional deal with software giant Oracle and retailer Walmart mid-September, under which ByteDance would establish a new US-headquartered company called TikTok Global that would be majority owned by US investors. Oracle and Walmart tentatively agreed to take a 12.5% and 7.5% stake in the new entity. As part of the arrangement, Oracle would become TikTok's "trusted technology provider" and would be responsible for processing all US user data in its servers. However, control of TikTok's source code and algorithms would remain with ByteDance—one element of the deal that may not satisfy user privacy concerns. Taking control of TikTok's source code formed a key element of Microsoft's proposal to put in place user-privacy protections for the US operation, a proposal that was ultimately rejected.

President Trump said he "agreed in principle" to the Oracle-Walmart deal on September 20, but it is yet to be fully approved by the US government.

The deal will also need to be approved by the Chinese government, which introduced new regulations in late August on the export of artificial intelligence technologies such as voice and text recognition, and those that analyse data to make personalised content recommendations, among other technologies. 

Last week, TikTok filed a petition in a US Court of Appeals calling for a review of actions by the Trump administration, claiming that its application for an extension to the November 12 deadline had fallen on deaf ears. TikTok said it had received "no substantive feedback" from the goverment in the nearly two months since it submitted its TikTok Global proposal, and that it not received any communication from the Committee on Foreign Investment in the United States (CFIUS) in weeks. As the November 12 deadline fast approached, it asked the appeals court to void the order.

On Friday (November 13), TikTok told a federal judge that the US government had granted the company's request for an extension.

It now has until November 27 to get its proposed deal rubber-stamped.

TikTok did not have a comment to provide on this story.

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