ByteDance is making use of for an export license from China because the TikTok deal is awaiting approval


The TikTok app icon appears on a smartphone in front of the national flags of China and the United States in this arranged photo in London, United Kingdom on Monday August 3, 2020.

Hollie Adams | Bloomberg | Getty Images

GUANGZHOU, China – TikTok owner ByteDance has applied for an export license under Chinese regulations as it pushes for a contract with Oracle and Walmart for the US video-sharing app operations to avoid a shutdown in the country.

The application was submitted to the Beijing trade office, ByteDance said in a Chinese statement on Thursday. The company said it was waiting for a decision.

However, the statement made no mention of the upcoming deal in the U.S. or the exact technology used to apply for 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 export restricted technologies to include technologies for "recommending personalized information services based on data analysis". This appeared to be related to TikTok's core recommendation algorithm, which suggests videos to users and is seen as the reason for the app's popularity.

ByteDance said it will abide by any technology export rules that Beijing could have a say in the final deal.

Over the weekend, Oracle announced that it would acquire a 12.5% ​​stake in a new US company called TikTok Global and be the cloud provider that processes US user data. Walmart would take a 7.5% stake.

President Donald Trump said he conceptually approved the deal.

Confusion arose when ByteDance came out on Monday saying it would have an 80% stake in TikTok Global. Oracle responded that the Americans will have "majority" control of TikTok Global.

That's because Americans will have four out of five seats on the board. However, by calculating by ByteDance's American investors, Oracle can also claim that the new company would be funded primarily with US funds. CNBC breaks down the position of each side here.

TikTok should be closed on Sunday in the US. But since the deal was announced on Saturday, that ban has been delayed by a week.

Over the weekend, the state-backed tabloid Global Times hailed the deal as "unfair" but "reasonable". However, as confusion over the deal spread, the publication, which is often viewed as inconsistent with Beijing's thinking, accused the US of "hooligan logic" in pushing certain terms, adding that it could not see China approve the agreement.

The state-backed China Daily also published an editorial calling the deal "dirty and unfair" and saying Beijing had "no reason to give the green light to such a deal."


Katherine Clark