The U.S. Department of Commerce said that it has delayed until Sept. 27 the prohibition of the Chinese mobile application TikTok. The department had previously announced that the ban would start today.
The decision comes after U.S. President Donald Trump said he had given his “blessing” to a proposed deal in which the U.S. software company Oracle and the giant retailer Walmart would partner with TikTok. “I approved the deal in concept,” Trump said on Sept. 19.
Under the deal, TikTok will create a new company called TikTok Global that will be responsible for providing all services to users in the U.S. and most of the users in the rest of the world.
Oracle is scheduled to obtain a 12.5 percent stake in TikTok Global and become its cloud provider. Meanwhile, Walmart has “tentatively agreed” to purchase 7.5 percent of TikTok Global as well as enter into commercial agreements to provide its e-commerce, fulfillment, payments and other omnichannel services to the company. Walmart’s chief executive, Doug McMillon, would also serve as one of the five board members of the new company.
But, the retailer noted, there “is still work to do on final agreements.”
A separate joint statement by Walmart and Oracle noted that TikTok Global will be majority owned by American investors and stand as an independent American company, headquartered in the U.S., with four Americans on the five-member board of directors.
All the TikTok technology will be in possession of TikTok Global, and comply with U.S. laws and privacy regulations. “Data privacy for 100 million American TikTok users will be quickly established by moving all American data to Oracle’s Generation 2 Cloud data centers,” the statement said.
The company will hold an initial public offering (IPO) in less than 12 months and be listed on a U.S. exchange. “After the IPO, U.S. ownership of TikTok Global will increase and continue to grow over time,” the companies said.
Trump signed executive orders on Aug. 6 to ban the app on grounds of national security and give the Department of Commerce 45 days to identify transactions to protect national security and users’ data.