Tech

'Hooligan logic': Chinese state media hardens stance on TikTok deal, casts doubt over Beijing's approval

Key Points
  • Chinese state-backed tabloid Global Times, often seen as being close to Beijing's thinking, said it was hard for it to believe Beijing will approve the TikTok deal in its current form.
  • The tabloid took issue with some of the terms of the deal including the 4-1 majority of Americans on the TikTok Global board and the fact Oracle can inspect the app's source code. 
  • Currently, confusion reigns over the deal with TikTok parent ByteDance saying it will own 80% of the U.S.-based TikTok Global and Oracle saying that Americans will have "majority" control of the new entity. 
China and U.S. flags are seen near a TikTok logo in this illustration picture taken July 16, 2020.
Florence Lo | Reuters

Chinese state media has accused the U.S. of "hooligan logic" in its push for certain conditions in the TikTok deal and cast doubt over whether Beijing will approve the terms.

State-backed Global Times appears to have changed its stance toward the deal after more confusion over the terms of the agreement in which a new U.S.-based company, called TikTok Global, will be set up with U.S. giants Walmart and Oracle taking minority stakes. 

The publication, often seen as being close to Beijing's thinking, called the deal "unfair" on Monday and accused Washington of "bullying" and "hooligan logic" because of the specific terms of the deal.

The Chinese tabloid completely changed its tune just one day after saying it expects Beijing to approve the "reasonable" deal.

Confusion currently reigns and things are getting messier.

On Saturday, President Donald Trump gave an in-principle approval to the deal which would see Oracle become TikTok's cloud provider, hosting and processing U.S. user data. TikTok would avoid being shutdown in the U.S. 

On Sunday, Global Times published an opinion piece in which it called the deal "reasonable," saying ByteDance had avoided the worst-case scenario of a TikTok shutdown or full sale. The tabloid added that the Chinese government was likely to approve the deal. 

On Monday morning China time, TikTok's parent company ByteDance released a statement in Chinese in which it said it was clearing up rumors around the deal. ByteDance said it would own an 80% stake in TikTok Global and would not transfer any algorithms or technology to Oracle. Instead, Oracle could inspect the source code to ensure it addresses Washington's national security concerns. 

Then on Monday morning in the U.S., Trump said on Fox News that the Chinese wouldn't have anything to do with TikTok after the deal was sealed, and that Oracle and Walmart would have "total control" over the app, which is actually not the case.

Oracle's Executive Vice President Ken Glueck released a statement to CNBC shortly after Trump's remarks that said Americans will have a "majority" of control over TikTok Global. He also said ByteDance will "have no ownership" over the new entity. 

From 'reasonable' to 'robbery': Global Times changes its view

The latest comments from Trump and Oracle appear to have changed the Global Times's view on things. In an opinion piece published late Monday, the state-backed tabloid ran the headline: "Say 'No!' to US robbery of TikTok."

"It caters to the unreasonable demands of Washington. It's hard for us to believe that Beijing will approve such an agreement," the Monday op-ed read.

In the article, they took issue with a few of the terms of the deal. One was that Americans would make up four out of five of the board seats of TiKTok Global, while ByteDance's CEO and founder Zhang Yiming will take the remaining one. 

Another issue was the fact that Oracle would be able to inspect TikTok's source code. The Chinese tabloid claimed that "TikTok and Douyin should have the same source code, this means the US can get to know the operations of Douyin, the Chinese version of TikTok." 

VIDEO7:5807:58
What is ByteDance?

Douyin is the Chinese version of TikTok, and is operated only in China by ByteDance. It's not clear whether the source code for both Douyin and TikTok is the same, or whether Oracle would be able to get to know Douyin's operations as a result.

The Global Times also claims that TikTok Global will control the business of TikTok around the world and alleged that it will block users from the Chinese mainland from accessing it. It is still not clear if TikTok Global would block Chinese internet users from accessing the app.  

ByteDance did not respond to a request for comment on the latest developments and the claims made by the Global Times when contacted by CNBC.

Oracle was not immediately available for comment when contacted by CNBC.