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President Donald Trump has approved a deal under which Oracle and Walmart will acquire a minority stake in a US-based company called TikTok Global. ByteDance, the parent company of TikTok, says it will own an 80% stake.
Nicholas Economo | Norfoto | Getty Images
President Joe Biden signed an executive order on Wednesday that sets criteria for the government to assess the risks of apps linked to foreign adversaries, a move that has implications for Chinese-owned apps like TikTok and WeChat.
Biden rescinded and replaced the three executive orders issued by former President Donald Trump that sought to block transactions with TikTok and WeChat by US companies. One order also bans TikTok, which led to a protracted court battle. TikTok remains available and popular in the US
Biden’s new order will direct the Commerce Department to review applications linked to foreign adversaries and define what should be considered an “unacceptable risk,” according to the White House fact sheet. This includes criteria for evaluating transactions with software applications associated with a foreign discount, which typically fall under the supervision of the Committee on Foreign Investment in the United States, or CFIUS. The order considers transactions to have an “increased risk” when they involve apps owned, controlled or operated by people who support an enemy military or foreign intelligence, or when the apps collect sensitive personal data, for example.
The order also directs the Commerce Department to work with other agencies to come up with recommendations to protect US consumer data from foreign adversaries. The Department of Commerce is required to recommend further enforcement actions and legislation to address the risks.
Under the previous administration, TikTok remained in a precarious position as Trump sought to ban the app unless it was sold to a US company. The confrontation prompted Walmart and Microsoft to team up with TikTok and prosecute TikTok, though the company eventually chose Oracle as its “Trusted Technology Provider,” which fell short of a full sale.
Biden’s rise to the White House has stymied the deal and ongoing legal action between TikTok and the government. In February, the Wall Street Journal reported that the Oracle deal had been “indefinitely put on hold,” according to sources. The Biden administration has asked the court to defer action over the government’s dispute with TikTok over the ban while it reviews the situation. White House press secretary Jen Psaki said at the time that a CFIUS review of TikTok was underway.
Representatives for TikTok and WeChat owner Tencent did not immediately respond to a request for comment.
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