Written by: Barbara Abreu
Thursday, September 10, 2020, 11:41 PM
An article by CNBC reports on developments from China, which impact the deal to sell TikTok’s US business to either Microsoft and Walmart or Oracle.
What’s going on?
The Trump Administration’s announcement to ban Tiktok in45-days unless it is acquired by. an American company expires in 9 days, Septtember 20th
.Mcrosoft and Walmart have teamed up to potentially acquire the company. Another contender for the acquisition is Oracle.
What are the important points?
- According to CNBC the “[d]eal talks for TikTok’s U.S. operations have hit a snag thanks to China’s crackdown on its tech export rules that were announced late Friday” (“China’s Tech.., 2020).
- “Also, CNBC reports, “[a] new Wall Street Journal report says the issue is whether the app’s core algorithms, which determine the videos that are served to users, can be included as part of a deal” (“China’s Tech.., 2020).
- CNBC goes on to say,”[t]he reports says potential buyers consider that formula is a large part of the value of TikTok” (“China’s Tech.., 2020).
- Further, CNBC reports,”[i]t’s still unclear whether China would have to sign off on that part of the sale” (“China’s Tech.., 2020).
- CNN reports “President Donald Trump said Thursday he will not extend the fast-approaching September 20 deadline he set for ByteDance, the Chinese-owned parent company of Tiktok, to sell the popular app or have it be banned” (LeBlanc, 2020).
What is TikTok?
Tiktok is a popular social networking app designed to allow users to share bite-size videos with friends. According to CNN, Tiktok is “the first Chinese social media platform to gain significant traction with users outside of its home country” (LeBlanc, 2020).
- According to CNN, Tiktok “was downloaded 315 million times in the first three months of this year” (LeBlanc, 2020).
- Tiktok has “more quarterly downloads than any other app in history, according to analytics company Sensor Tower” (LeBlanc, 2020).
What’s the original source?
What is my opinion?
The unprecedented announcement by President Trump suggesting the US takes a cut of the deal shows weakness in American political institutions. If the deal does go through it will constitute a taxable event, which is the appropriate way for the US to get a cut of the action.
What is the relevance to Global Corporate Citizenship?
Global Corporate Citizenship teaches of international political business strategies and this news story helps exemplify these principles from the course.
“ByteDance Is Poised to Miss U.S. Deadline for TikTok Sale.” Bloomberg.com, Bloomberg, 10 Sept. 2020, www.bloomberg.com/news/articles/2020-09-10/bytedance-is-said-poised-to-miss-u-s-deadline-for-tiktok-sale.
“China’s Tech Export Restrictions Put TikTok Deal in Question: WSJ.” CNBC, CNBC, 2 Sept. 2020, www.cnbc.com/video/2020/09/02/china-tech-export-restrictions-tiktok-deal-squawk-box.html.
LeBlanc, Paul. “Trump Says He Won’t Extend Deadline for US TikTok Sale.” CNN, Cable News Network, 11 Sept. 2020, www.cnn.com/2020/09/10/politics/trump-tiktok-extension-executive-order/index.html.