TikTok deal talks drag on as Biden administration mulls China policy

The Trump administration had contended that TikTok poses national security concerns as the personal data of US users could be obtained by China’s government.

A man holding a phone walks past a sign of Chinese company ByteDance's app TikTok, known locally as Douyin, at the International Artificial Products Expo in Hangzhou, Zhejiang province, China. (REUTERS)

A plan for US investors, including Oracle Corp and Walmart Inc, to buy a majority stake in TikTok's American operations could face months of additional reviews, as the new Biden administration conducts a wide-ranging review of Trump administration China policy, two people briefed on the matter said.

The Trump administration had contended that TikTok poses national security concerns as the personal data of US users could be obtained by China's government. The popular social media video service, which has over 100 million users in the United States, has denied the allegation.

Three federal judges in separate rulings blocked US Commerce Department orders issued under then-President Donald Trump that sought to bar new downloads of TikTok and Chinese-owned WeChat and impose restrictions that would effectively bar their use in the United States. Those rulings are on appeal before U.S. circuit courts.

A court hearing on one of the legal challenges is set for Thursday.

Many key Biden administration officials are not yet in place to review the status of TikTok. TikTok declined to comment.

The two sources briefed on the matter spoke on condition of anonymity because they were not authorized to talk publicly about the talks.

The White House did not respond to repeated requests for comment on Wednesday.

However, the White House told the Wall Street Journal it is developing "a comprehensive approach to securing US data that addresses the full range of threats we face. ... This includes the risk posed by Chinese apps and other software that operate in the US In the coming months, we expect to review specific cases in light of a comprehensive understanding of the risks we face."

Walmart declined to comment. Oracle did not immediately respond to a request for comment.

Under pressure from the Trump administration, ByteDance was in talks for months to finalize a deal with Walmart and Oracle announced in September to shift TikTok's US assets into a new entity to address American security concerns. Those talks have been ongoing after Biden took office, sources said.

In early December, the Trump administration chose not to grant ByteDance a new extension of a divestiture order issued by the president in August requiring the company to divest TikTok's US assets. That gave the Justice Department the power to enforce the divestiture order once the deadline expired.

The Justice Department has taken no action to enforce it.