U.S. Judge Takes TikTok Side in Case Against Trump

TikTok's future in the U.S. remains unclear, but the court has sided with the Chinese app in some aspects.
Anthony RussoSep 25,2020,17:32

A U.S. judge has ordered the Trump administration to postpone the ban of the popular short-video app TikTok or explain its policy.

Federal district judge Carl Nichols has given the Trump administration until Friday afternoon to either delay or file a response. Else, a court order will temporarily block the ban, as requested by TikTok’s Chinese owner ByteDance.

ByteDance is looking for a preliminary injunction on the ban, which is slated to go into effect on Sunday before midnight.

If the Trump administration does not postpone the ban, the judge will hold a hearing on Sunday morning regarding the injunction request.

The TikTok drama continued even after Trump greenlighted a deal that would establish a new U.S. entity, TikTok Global. The new firm would have Oracle (NYSE: ORCL) and Walmart (NYSE: WMT) holding stakes of 12.5% and 7.5%, respectively.

However, confusion remained regarding the ownership structure of the new entity. Earlier this week, ByteDance claimed that it would still own 80% of TikTok Global and it would be a subsidiary of the company. However, both the Trump administration and Oracle have said otherwise.

"Americans will be the majority and ByteDance will have no ownership in TikTok Global," Ken Glueck, vice president of Oracle, said on Monday.

Trump also fired back at ByteDance, saying ByteDance "will have nothing to do with [TikTok Global], and if they do, we just won't make the deal.”

Meanwhile, CNN reported today citing a person familiar with the deal that ByteDance will maintain “zero percent” of TikTok Global. Instead, the medium said, Walmart and Oracle would control just over 50% of the new firm, while the investors of ByteDance would own the rest.

Another Chinese app facing U.S. sanctions is WeChat, a messaging platform operated by tech giant Tencent (HKEX: 00700; OTC: TCEHY). The Justice Department is seeking an immediate ban on downloads of WeChat in the Apple and Google app stores, as CBS News reported today.

Could the TikTok vs. Trump lawsuit create a precedent for WeChat?

Topics:TikTok, ByteDance, Walmart, Oracle, Tencent, WeChat