ByteDance applies for export license from China as TikTok deal waits for approval

The TikTok app icon sits displayed on a smartphone in front the national flags of China and the U.S. in this arranged photograph in London, U.K., on Monday, Aug. 3, 2020.

Hollie Adams | Bloomberg | Getty Images

GUANGZHOU, China — TikTok owner ByteDance has applied for an export license in line with Chinese regulations, as it pushes for a deal with Oracle and Walmart for the video-sharing app’s U.S. operations to avoid a shutdown in the country.

The application was submitted to the Beijing municipal bureau of commerce, ByteDance said in a statement in Chinese on Thursday. The company said it was waiting for a decision.

But the statement did not mention the pending deal in the U.S. nor the exact technology it was looking to get a license for export. 

ByteDance did not immediately respond to a request for comment when contacted by CNBC.

Last month, China updated its list of technologies subject to export restrictions to include technologies for “recommendation of personalized information services based on data analysis.” This appeared to relate to TikTok’s core recommendation algorithm that suggests videos to users and is seen as a reason behind the app’s popularity. 

ByteDance said it would abide by any technology export rules, which could give Beijing a say in the final deal. 

Over the weekend, Oracle said it would take a 12.5% stake in a new U.S.-based company called TikTok Global and be the cloud provider, handling American user data. Walmart would take a 7.5% stake. 

President Donald Trump said he approved the deal in concept.

Confusion emerged when ByteDance came out on Monday and said that it would have an 80% stake in TikTok Global. Oracle then responded saying Americans will have a “majority” of control over TikTok Global. 

That’s because Americans will make up four out of five board seats. But also, through a calculation of ByteDance’s American investors, Oracle can claim the new entity would be backed by mostly U.S. money. CNBC breaks down each side’s position here

TikTok was going to be shut down in the U.S. on Sunday. But since the deal was announced Saturday, that ban has been delayed by a week. 

Over the weekend, state-backed tabloid Global Times, hailed the deal “unfair” but “reasonable.” As confusion spread over the deal however, the publication, which is often seen as being close to Beijing’s thinking, accused the U.S. of “hooligan logic” in its push for certain conditions, adding it cannot see how China will approve the deal.

The state-backed China Daily also published an editorial in which it called the deal “dirty and unfair” and said Beijing has “no reason to give the green light to such a deal.”

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