Does TikTok/Oracle/WalMart 'Partnership' Accomplish Anything?
Update (1205ET): From the minute Oracle emerged as the 'victor' in the battle to purchase TikTok US, it was clear to many that the reason the proposal submitted by the Microsoft/Wal-Mart team had been rejected was because this actually wasn't a "deal" after all. Somehow, Oracle had managed to read the tea leaves. From the earliest days of the talks, Larry Ellison's company had been said to be favoring an approach that would look more like a licensing deal than a buyout.
In a column on the news published Monday in the Verge, policy editor Russel Brandom gets right to the point: "Oracle's TikTok deal accomplishes nothing," the piece blares in the headline.
In the hours since it was written, the relationship has gotten even more complicated, with Wal-Mart reportedly getting a piece of the action, according to the Chinese press.
On Sunday night — just two days before the deadline set by Microsoft — the TikTok deal finally came through. Oracle will be taking over stewardship of TikTok’s US operations, after Chinese parent company ByteDance turned down a more ambitious bid from Microsoft. This morning, Treasury Secretary Steven Mnuchin confirmed the deal and said it would be presented to President Trump with a recommendation later this week. But barring a complete catastrophe, TikTok will keep operating in the US. However weird the details are, TikTok’s 1,400 US employees and tens of millions of US users are breathing a sigh of relief this morning.
But the last-minute sale is strange in a number of ways — for a start, it’s not a sale at all. After months of insistence that TikTok sever its US operations from Chinese ownership, we’re now settling for a vague partnership between Oracle and the US TikTok operation. It’s still unclear exactly what Oracle’s “trusted tech partner” status entails, but it’s definitively not a sale, and it’s unlikely Oracle is taking over any significant operations from the US TikTok offices. Microsoft’s version of the deal would have severed American TikTok from Europe and Asia entirely, but Oracle’s version of the deal leaves it mostly intact. US TikTok will stay the same as Korean TikTok and Nigerian TikTok; it’s just getting an extra babysitter. That makes it less of a sale and more of a glorified hosting deal. It lets Trump say he’s solved the problem but doesn’t do much else.
Aside from Oracle collecting checks for serving as a "glorified babysitter", like the Verge points out, Jasper Lawler, the head of research at LCG Trading, argued that this deal is the "latest evidence that the US is moving in a direction of China-style state capitalism".
https://www.zerohedge.com/markets/mnuchin-confirms-cfius-will-issue-decision-oracle-tiktok-deal-coming-days