White House Chief of Staff Mark Meadows said he’s concerned that Oracle Corp.’s bid for the Chinese-owned video app TikTok may be a “repackaging” that won’t meet President Donald Trump’s goals.
“We’re still looking at the potential details of the deal, and whether it meets the national-security thresholds, the American-interest thresholds,” Meadows said Thursday. “My big concern is if all we’re doing is repackaging it and still keeping it as a predominantly Chinese-government run company, that would not set well with the original goal the president outlined.”
Under the plan, which would need Trump’s approval to move forward, TikTok’s Chinese owner, Bytedance Ltd., would retain a majority of the company’s assets, with Oracle acquiring a minority stake.
Top Trump administration officials — including Secretary of State Mike Pompeo — have raised concern that Oracle’s proposal for TikTok’s U.S. operations falls short of satisfying national-security concerns, according to people with the matter. Their position could sway whether the bid succeeds or fails, but Trump has the authority to approve or deny any deal.
Under the proposal, Oracle would get full access to review TikTok’s source code and updates to make sure there are no back doors used by the company’s Chinese parent to gather data on the video-sharing app’s 100 million American users, according to people familiar with the matter.
ByteDance and Oracle submitted these details in their proposal to the Trump administration, with a goal of averting an outright sale of the app or a shutdown of its U.S. operations set to take effect Sept. 20. Trump has threatened to ban the app in a pair of executive orders issued last month based on U.S. national security concerns.
Beijing is less likely to oppose the current deal since it doesn’t involve the transfer of ByteDance’s algorithms — which recently enacted Chinese export restrictions specifically encompass — a person close to the negotiations said. Trump, speaking Wednesday with reporters, said he is getting a briefing on the issue Thursday morning, adding that he didn’t like the idea of ByteDance retaining control of TikTok.
“Just conceptually, I can tell you I don’t like that,” he said Wednesday after a reporter told him that ByteDance would retain a majority of the company’s assets, with Oracle acquiring a minority stake.
“I’m not prepared to sign off of anything,” Trump said. “I have to see the deal.”
TikTok has emerged as a top target in Trump’s effort to crack down on China ahead of the Nov. 3 election. The president is trailing his Democratic opponent Joe Biden in the polls and seeking to use his tough stance with Beijing as a selling point to voters. That’s despite the fact that American investors collectively hold roughly 40% of ByteDance’s equity, with the rest owned by founder Zhang Yiming, ByteDance employees and non-U.S. investors, the person said.
American officials have argued that while ByteDance may not be a state-owned enterprise, at the same time it is bound to follow orders from China’s Communist leadership.
— With assistance by Nick Wadhams, and Shelly Banjo
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