TikTok deal at risk: Will United States or China control the app?

A deal intended to address the Trump administration’s concerns about TikTok’s ties to China was complicated on Monday by a disagreement over whether a US company would control the social media app and the president’s threat to block any agreement that leaves the service in the hands of a Chinese company.

On Saturday, President Donald Trump said he had given his “blessing” to a transaction that he said would result in non-Chinese investors, including Oracle and Walmart, owning TikTok.

But ByteDance, the Chinese owner of TikTok, threw cold water on that structure Sunday, disputing both Oracle’s and Trump’s characterization of the deal. ByteDance said it would hold a majority share of the new company until it went public within the next year. Oracle said Monday that as soon as the new company, TikTok Global, was created, ByteDance would lose its ownership stake in the service.

Read: US President Donald Trump to 'cut off' TikTok if deal cannot be saved

Asked during a television appearance on Fox & Friends on Monday about the potential that ByteDance would still own 80 per cent of the service, Trump said that the Chinese firm would “have nothing to do with it, and if they do, we just won’t make the deal.”

On Saturday, the Commerce Department delayed for one week a plan to ban TikTok from US app stores while the government reviewed the transaction. If the deal doesn’t satisfy Trump’s concerns, new downloads of TikTok could essentially be banned in the United States.

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China could also scuttle the deal.

A spokesman for TikTok said Sunday that ByteDance would hold 80 per cent of the new company until a planned public offering for the service took place on the US stock market in about a year. Oracle and Walmart would hold a 20 per cent stake, the spokesman said. ByteDance echoed that characterization in a statement posted online in China on Sunday, where it said that the deal did not involve a transfer of TikTok’s valuable algorithm — a detail that is likely to fuel the administration’s national security concerns.

On Monday, Ken Glueck, an executive at Oracle, said in a statement that upon “creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global.”