The parent company of TikTok has taken the next step to close the deal with the American companies Walmart and Oracle. Bytedance has officially applied for an export license to the Chinese authorities and is now waiting for the green light.
The company is still waiting for a response to the application. CNBC reports this based on an announcement from ByteDance.
Bytedance needs permission from the Chinese government because China imposed stricter export regulations. If a company sells technology that makes recommendations based on algorithms, then China wants to have the final say.
And that makes the sale of TikTok complicated. Because if TikTok is good at something, it is making recommendations based on the behavior of the users. In the announcement, Bytedance does not say which technology will be exported.
What’s going on again?
The popular video app has long been under fire in the US. President Donald Trump fears that US usage data will end up in Chinese hands. That is why he forced ByteDance to sell the American branch of TikTok. The company should be in American hands, Trump believes. If not, the app will be banned.
But that selling only partly happens. ByteDance is starting a new company: TikTok Global. And in that company Oracle, maker of business software, and supermarket chain Walmart will have a combined share of 20 percent .
All US data is then stored on Oracle servers and the company becomes responsible for handling data securely.
Who is the boss?
China and America both say something different about who gets the reins. Oracle says that TikTok will soon be in American hands. They include the share of American investors in ByteDance (about 40 percent), making 53 percent of the new company to be founded American. ByteDance disputes this and says that the Chinese remain in charge.
Trump has already approved the deal. But we still have to wait for a formal agreement by the Ministry of Finance. And China has yet to give its approval.
Bytedance asks for a postponement of the download ban
ByteDance has until this weekend to get everyone’s approval and close the deal. If that fails, new downloads of the app will be banned in the US.
But ByteDance tries to prevent that by going to court. The company says that TikTok will suffer irreparable damage if the app is no longer allowed to download. Bytedance wants the judge to rule before the ban takes effect this Sunday.
Until then, Bytedance will consult with a special committee of the U.S. Treasury Department in the hope that they approve the deal. The first reports from China are not very hopeful.
Chinese state media call the deal extortion , writing that China has no reason to approve the deal, because it is “dirty and unfair and based on harassment and exploitation.”