September 29, 2020 Vanessa Niragira
The deal with TikTok is a lot to keep track of, because… well it’s very confusing. But let’s do a short recap of what’s happened. In a previous blog, we touched on the threat of the TikTok ban from US President Donald Trump.
For weeks, President Trump threatened to ban TikTok because it’s owned by Chinese company ByteDance. Trump claimed the app gives Beijing access to American personal data and as such, is a national security threat. TikTok has repeatedly denied those allegations, yet the ban was set to go into effect on September 20.
Since then, a tentative deal between Walmart and Oracle (the computer software company) has taken place, in which the two companies would hold a combined 20% stake (12.5% Oracle, 7.5% Walmart) in a new company called TikTok Global, with the remaining 80% to be held by ByteDance. The decision to use Oracle was heavily influenced by Zoom’s successes in shifting a large portion of its video conferencing capacity to the Oracle Public Cloud.
TikTok Global will be headquartered in the US and operate the app from there to comply with US laws and privacy regulations within Oracle’s Generation 2 Cloud data centers. Oracle will be held responsible for hosting all TikTok’s US user data and securing computer systems to ensure US national security requirements are satisfied. Whereas Walmart will provide its eCommerce, fulfillment, payments as well as other services to the new company.
Trump has stated that it will be located in Texas and will bring 25,000 jobs as well as generating over 5 billion towards the US economy.
BUT… this is not a done deal, Trump has also said that if Oracle doesn’t have “total control” of the company, he may retract his approval.
Many continue to worry they’ll lose access to the app, which is understandable considering the term “ban” has been thrown around.
However, under the terms of the threatened ban, those who have already downloaded the app or have had the app on their phone are able to continue using it. Because no new downloads will be able to happen that also means security patches and new updates won’t be able to go through. This could mean potential glitches and a loss of access from the app that way.
As the future of TikTok remains uncertain, we continue to recommend that American marketers hold off on leveraging TikTok until a formal deal has been put in place and the app is approved by both the United States and Canadian governments.
Want to read more about how TikTok could improve your business? Review TikTok Challenges – How Successful Brands are Using Them and Sweepstakes, Contests, and TikTok.
Vanessa Niragira, Oakville, Ontario, Sep 2020