TikTok and WeChat avoid Sunday ban

TikTok and WeChat were facing a ban by the Trump administration. The Commerce Department issued an order prohibiting downloads as of Sunday. On Saturday, WeChat saw an 800% increase in downloads, according to Sensor Tower.

Both companies managed to avoid the ban for now. Trump said that he would allow TikTok, Oracle, and Walmart to go over a deal, prompting a one-week delay for the TikTok ban. A judge in California has also issued a preliminary injunction blocking the WeChat ban.

It seems that Oracle will become a “trusted tech partner” and host all US user data on their servers. Oracle and Walmart will participate in a TikTok Global pre-IPO financing round to take up to a 20% cumulative stake in the company. ByteDance mentioned that it would own 80% of the TikTok Global.

The deal has not yet been finalized, and some parts are a bit fuzzy. All parties agreed that the new headquarters would be in the US and bring 25,000 jobs. The deal includes a $5 billion donation toward US education, which was a surprise to ByteDance. ByteDance has released a blog post saying that the tax payment of $5 billion was an estimate of the corporate taxes TikTok Global would pay over several years if the venture were successful. The TikTok ban is delayed until September 27th.

The future of WeChat is quite uncertain in the US. An order was written by judge Laurel Beeler, that an August lawsuit by a group of WeChat users showed “serious questions going to the merits of the First Amendment claim.” Beeler wrote that the plaintiffs’ “evidence reflects that WeChat is effectively the only means of communication for many in the community, not only because China bans other apps, but also because Chinese speakers with limited English proficiency have no options other than WeChat.”

Even though Beeler agrees that the US government identified significant threats to national security, there was little evidence showing the WeChat ban would address those concerns.

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