Trump approves TikTok deal. But big questions remain

The US Department of Commerce pushed back a threatened ban on US downloads of the app by one week, to the end of the day on September 27. But as the companies race to finalize the proposal, crucial questions over data security, national interest and the deal’s structure remain unanswered.

What is clear is that the fight over TikTok is bigger than who owns an app popular with Generation Z. It’s also about the future of US-China relations, and the rough new terrain businesses are forced to navigate as tensions between the world’s two biggest economies ramp up.

Trump has for weeks threatened to ban TikTok, which is owned by China’s ByteDance, on national security grounds unless an American company takes control of its US operations. TikTok has roughly 100 million users in the United States, and Trump claims the app gives Beijing access to the personal data of Americans.

TikTok has denied those allegations. The company has said its data centers are located entirely outside of China and that none of that data is subject to Chinese law.

Over the weekend, Trump gave his blessing to a deal that would give Oracle and Walmart a combined 20% stake in a new company called TikTok Global, which would be headquartered in the United States and operate the app. Four of the company’s five board members would be Americans, Oracle and Walmart said in a joint statement.

Speaking to reporters, Trump said he approved the deal “in concept.”

“I have given the deal my blessing,” Trump said. “If they get it done, that’s great. If they don’t, that’s okay, too.”

US will ban WeChat and TikTok downloads on Sunday

But the deal stops well short of the full sale of TikTok that Trump originally wanted, and its structure contradicts his claim on Saturday that the app will be “totally controlled” by Walmart and Oracle. ByteDance would own 80% of TikTok Global, the Chinese company said in a statement on Monday.

Oracle said it would host data pertaining to American users on its cloud platform. ByteDance said in a statement that Oracle would be able to review the app’s source code, but the deal does not involve the transfer of its algorithms and technologies.

Marco Rubio, a Republican senator, said there could still be a risk of US user data being sent to China.

“If China continues to control the code, as I understand they would in this deal, they could put in that code an instruction to secretly send data back to China, to the mainland. No matter where the actual data is housed there can be something embedded in that code that sends it the other way,” he said during an interview on Fox News.

Education fund?

Another source of confusion: Trump said the deal would also include a $5 billion fund for US education, though he did not say which companies would be making the payment.

ByteDance said Sunday that it was unaware that an education fund would be tied to the TikTok deal.

“Some news media reported that TikTok will set up a $5 billion education fund in the United States,” ByteDance said in a statement. “We would like to clarify that it was also our first time hearing about the news.”

Walmart and Oracle did not mention anything about an education fund in a statement released over the weekend, but they did say that TikTok Global “will pay more than 5 billion in new tax dollars to the US Treasury.”

In its statement on Monday, ByteDance described the “so-called tax payment” as “an estimation of the corporate income tax and other operating taxes that TikTok will need to pay for its business development in the next few years.”

A woman walks past the headquarters of ByteDance, the Chinese parent company of video app TikTok.

What’s Trump’s role?

Trump positioned himself as the kingmaker of any TikTok deal, making clear that he must agree to the terms before anything is made official.

If that seems unusual, it’s because it is. While governments often vet pending deals to protect consumers from monopoly power, and often do weigh national security when a merger is announced, Trump’s deep involvement is a stark departure from how deals are typically finalized — as is his move to compel a sale in the first place.

“In the end, Trump is the X-factor,” said Dipayan Ghosh, the co-director of the Digital Platforms and Democracy Project at the Harvard Kennedy School. “Whatever he wishes will happen, no matter the merits of the related set of policies underlying the proposal.”

Some experts think the Oracle deal could be helped along because of Trump’s ties to cofounder Larry Ellison, a supporter of the president. CEO Safra Katz has also donated to Trump’s reelection bid.

After the flurry of weekend activity, time is now running out again to sort through the agreement and secure approval from all parties. And it’s still not clear that the arrangement has backing from Beijing.

Why does this matter?

The battle for control of TikTok in the United States goes beyond social media, security concerns and who winds up in charge.

The outcome will also have major geopolitical consequences, as the United States and China move further apart under Trump.

For a while, the focus was on trade and protecting intellectual property, with both sides slapping tariffs on hundreds of billions of dollars in goods while government officials tried to negotiate new terms of engagement. But over the past two years, sensitive technology has become a big area of contention, too.
The US government has been conducting a long campaign against China’s Huawei, which makes smartphones and is a leading manufacturer of equipment for 5G wireless networks. Citing similar spying concerns, the Trump administration has pushed allies to opt for other 5G equipment vendors, while cutting off Huawei’s access to US technology, including crucial computer chips.

As pressure expands to other parts of the tech industry, companies are considering the emergence of a new world order that could reshape how global firms do business.

Tencent's WeChat has also been targeted by the Trump administration.

Deutsche Bank has estimated that supply and demand disruptions, along with the construction of a “tech wall” that forces companies to create two sets of standards for the United States and China, could cost companies $3.5 trillion over the next five years.

The broader economic relationship is also at stake at a delicate moment following the historic shock from the pandemic. In a report published in mid-September, the consultancy Rhodium Group found that US-China investment dropped to its lowest level in nine years during the first half of 2020 as tensions rose.

I use TikTok. What does it mean for me?

As the situation continues to evolve, TikTok’s tens of millions of US users worry they could lose access to one of their favorite products.

Under the terms of the threatened ban, people who already had TikTok on their phones could still post short videos of dances, fun recipes and comedy routines per usual, but no new downloads would be allowed. US users also wouldn’t be able to receive security patches or other updates, which could cause outages or glitches in the future.

Though a ban has been averted for now, fears about restrictions have sent TikTok downloads soaring. They rose 12% to 247,000 in the United States on Friday, compared to Thursday, according to preliminary estimates from Sensor Tower, a research firm.

— Brian Fung, Sherisse Pham, Jill Disis, Selina Wang and Shanshan Wang contributed reporting.

BBC's Andrew Marr erupts after Starmer dodges Brexit questions 'Straight answer, please!'

The BBC’s Andrew Marr blew up at Sir Keir Starmer this morning, demanding some “straight answers” on Brexit. Andrew Marr grilled the Labour leader on questions around fisheries, state aid and yet another Brexit extension. When Sir Keir appeared to dodge the questions, Marr erupted: “A straight answer, please!”

Marr had asked Sir Keir whether he would back down to EU demands on fisheries and state aid.

The BBC host said: “To resolve this problem with the EU there are two things that can happen.

“Either there is agreement on the two outstanding issues, which is fishing and state aid.

“Would you agree that the EU position is right on that or would you like the UK to hold out against the EU?”

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Sir Keir responded: “I think those two issues are capable of resolution.

“I think the government should get on with negotiating instead of introducing legislation to breach the agreement it already signed.”

Marr continued to press: “If these talks break down completely, as they might do in the next few days, would you support an extension?”

When Sir Keir said “these talks don’t need to break down, Andrew,” the BBC host hit back: “A straight answer, please!”

He later said he was sceptical of the Government’s arguments on state aid because the UK does not spend as much on state aid as currently allowed under EU rules.

He pointed to the amount of state aid that Germany and France use, adding: “I think the question on state aid is why on earth are they not taking advantage of the rules as they are now?

“Germany and France do. If they are so keen, they should get on and use it.”

Sir Keir also told Marr that a second independence referendum would have to be “looked at” if the SNP win a majority at the next election.

He continued: “I think another independence referendum will be divisive and that’s why the Labour Party will be campaigning into the May elections on the economy and ensuring our public services are in the right place and defeating coronavirus.

“I am frustrated in a sense, that in the middle of a pandemic, we’ve got the SNP talking about independence, we’ve got the Tory party talking about Brexit.”

After the Wirecard scandal, fintech sector faces scrutiny and questions of trust

The summer of 2018 was a heady one to be involved in the fast-blooming fintech sector.

Fresh from getting their European banking licenses, companies like Klarna and N26 were increasingly making mainstream business headlines as they muscled in on a sector dominated by centuries-old players.

In September 2018, Stripe was valued at a whopping $20 billion (€17 billion) after a funding round. And that same month, a relatively little-known German payments company called Wirecard spectacularly knocked Commerzbank off the prestigious Dax 30 index. Europe’s largest fintech was showing others just how far they could all ultimately travel.

Two years on, and the fintech sector continues to boom, the pandemic having dramatically accelerated the shift towards e-commerce and online payment models.

But Wirecard was exposed by the relentless journalism of the Financial Times as a huge criminal fraud that conducted just a fraction of the business it claimed. What was once Europe’s fintech darling is now a shell of an enterprise. Its former CEO may go to jail. Its former COO is on the run.

The show is largely over for Wirecard, but what of other similar fintechs? Many in the industry are wondering if the damage done by the Wirecard scandal will affect one of the key commodities underpinning consumers’ willingness to use such services: trust.

The ‘trust’ economy

“It is simply not possible to connect a single case with an entire industry that is hugely complex, diverse and multi-faceted,” a spokesperson for N26 told DW.

“That said, any Fintech company and traditional bank must deliver on the promise of being a trusted partner for banking and payment services, and N26 takes this responsibility very seriously.”

A source working at another large European fintech said damage was done by the affair.

“Of course it does harm to the industry on a more general level,” they said. “You cannot compare that to any other company in that space because clearly that was criminally motivated.”

For companies like N26, they say building trust is at the “core” of their business model.

“We want to be trusted and known as the mobile bank of the 21st century, creating tangible value for our customers,” Georg Hauer, a general manager at the company, told DW. “But we also know that trust in banking and finance in general is low, especially since the financial crisis in 2008. We understand that trust is something that is earned.”

 Digitalbank N26 (picture-alliance/W. Kumm)

The fintech revolution has seen new players such as N26 (CEO Valentin Stalf, pictured) enter the banking business

Earning trust does appear to be a vital step forward for fintechs looking to break into the financial services mainstream.

Europe’s new fintech power

One company certainly looking to do this is Klarna. The Swedish payments company was this week valued at $11 billion following a raft of investment from the likes of BlackRock, Silver Lake and Singapore’s sovereign wealth fund GIC.

Speaking this week, the company’s CEO Sebastian Siemiatkowski was bullish about the fintech sector and his company’s prospects. Retail banking was moving from “being a balance sheet play to a tech play,” he told the Financial Times. “There’s a lot of havoc to wreak,” he said.

But Klarna has its own questions to answer. Even though the pandemic has boosted an already successful business, it has rising credit losses. Its operating losses have increased ninefold.

“Losses are a business reality especially as we operate and grow in newer markets,” Klarna spokesperson David Zahn told DW.

He emphasized the importance of trust in Klarna’s business, especially now that the company has a European banking licence and is already offering debit cards and savings accounts in Sweden and Germany.

Klarna Logo über Banknoten Symbolbild (Reuters/D. Ruvic)

Klarna is now one of the most highly valued European fintechs

“In the long run people naturally develop a new level of trust to digital services even more,” he said. “But in order to gain trust, we need to do our homework and that means we need to make sure that our technology works seamlessly, always act in the consumer’s best interest and cater for their needs at any time. These are a few of the key drivers to gain trust.”

Regulations and lessons learned

In the short term, the Wirecard scandal is likely to accelerate the need for new regulations in the fintech sector in Europe.

“We will assess how to improve the relevant EU rules so these kinds of cases can be detected,” the EU’s former financial services chief Valdis Dombrovskis said back in July. He has since been succeeded in the role by new Commissioner Mairead McGuinness, and one of her first jobs will be to oversee any EU investigations into the responsibilities of financial supervisors in the scandal.

Companies with banking licenses such as Klarna and N26 already face considerable scrutiny and regulation. Last year, N26 received an order from the German banking regulator BaFin to do more to investigate money laundering and terrorist financing on its platforms. Although it is worth pointing out that this decree came at the exact same time as Bafin chose to investigate Financial Times journalists rather than Wirecard.

“N26 is already a regulated bank, not a startup which is often implied by the term fintech. The financial industry is highly regulated for obvious reasons and we support regulators and financial authorities by closely collaborating with them to meet the high standards they set for the industry,” Hauer told DW.

While extra regulation and scrutiny may be coming for the fintech sector as a whole, the Wirecard affair has at the very least offered lessons for companies to follow individually, according to Adrian Klee, an analyst.

In a blogpost for the consultancy Ross Republic, he said the scandal has provided three primary lessons for fintechs. The first is to establish a “compliance culture” — that new banks and financial services firms are capable of following established rules and laws early and thoroughly.

The second is that companies expand in a responsible manner, namely that they grow as fast as their capability to comply with the law allows. The third is to have structures in place that allow companies to have thorough customer identification procedures in order to monitor users properly.

Managing all that while still “wreaking havoc” may be a tricky compromise.

Property: Make sure you ask your estate agent these questions to avoid being ripped off

With house prices on the rise, some Britons may be looking to move property. If doing so, there are some important questions they must ask an estate agent before signing up.

The experts warned against signing up with an agent who is not open about fees.

Instead, Britons must ask questions to find an estate agent who is upfront about all potential costs.

“You should pick an agent that is clear, open and honest about their fee from the offset,” the experts said.

“If you can, find an agent who offers a percentage-based fee rather than a fixed fee.


“This is because with a fixed fee, if your property price comes down, the agent would still get a higher amount – although you’re not getting as much for your home.”

They explained using an agent with a fixed fee could see homeowners lose out on money.

As well as picking a good estate agent, sellers should look for those who are the best fit to sell their type of home.

The experts added: “Although they could be a great agency, asking ‘how many houses like mine have you sold before’ will show you whether they’ve had any experience selling houses exactly like yours.

They added: “To help you choose which estate agent to go with, do your research and ask lots of questions before you make a decision.

“If you’re looking for a quick sale you should be asking them how long it takes them to sell properties like yours.

“If you’re worried about a sale falling through, ask them how often it happens to them.”

Tell us, Nicola! Sturgeon challenged to answer THREE questions on independence 'She can't'

Tony Miklinski told Nicola Sturgeon is aware of the economic uncertainty that will be created for Scotland as a result of independence but ignoring the big issues. He said Scotland’s First Minister should be focussing on cooperating with the Westminster Government post-pandemic to ensure the nation’s economic welfare.

Mr Miklinski said: “The fact that she knows, Nicola knows what the true cost of Scottish independence would be.

“Nicola knows that we are subsidised to the tune of £2,000 per head in this country by the UK Government because of the wealth created in the south.

“Nicola knows what the impact on our employment would be if we went independent.”

And he challenger her to answer three simple questions on Scottish independence. 

He said: “Nicola can’t tell us what the currency will be, Nicola can’t tell us what our pensions and pay will be worth, or mortgages will cost.

READ MORE: Nicola Sturgeon’s ‘one size fits all’ domestic approach blasted

“She knows all this and yet she is willing to drag us over the cliff of independence and probably walk away from it and say it is somebody else’s problem now.”

He continued: “The economic case for independence has never been made they tried basing it on the price of oil last time and that would have been catastrophic

“Post pandemic we need to get our economy moving, we need to get it thriving and the way to do that is by cooperating with Westminster, to have a cooperated Government here in Scotland, doing the best thing for employment and the general welfare of the Scottish people.

“That is not Nicola’s ambition, Nicola wants independent which is a very different thing.”

“She is not naturally of that ilk, she wants to be absolutely certain of winning.

“Therefore, the tensions in that party are very considerable.

“The fact that they have managed to keep it together for 14 years, you have got to admire it.

“The discipline they have had is at a cost, it means when things start to go wrong you can end up with a cataclysmic breakdown

“We have got to encourage that frankly for the good of the country, before they take us a place we do not want to go.”

Off-campus college party raises questions

A photo posted online of an off-campus college party in York County is raising questions about student safety, as college students begin arriving back on campus.

YORK, Pa. — A photo posted online of an off-campus college party in York County is raising questions about student safety, as some college students begin arriving back on campus.

Some students of York College were seen holding a large gathering Tuesday night, at which few were wearing masks or practicing social distancing.

York resident Artemus Walls snapped a photo of the party happening just a few doors down the street from him on W. Jackson St. He posted the photo online with the caption, “This is how York College regulates for Covid19. Let’s see how fast it spreads. Of course they do what they want. There are 4 or 5 more going on also. Smh.”

This is how York College regulates for Covid19. Let’s see how fast it spreads. Of course they do what they want. There are 4 or 5 more going on also. Smh

“I walked down on my porch and I saw something that concerned me,” Walls said. “If it wasn’t COVID, it would just be a good time.”

However, as the COVID-19 pandemic continues into the school semester, Walls said students should take more responsibility for reducing the spread of the virus.

“They’re grownups,” Walls said. “They should be worrying about themselves. But eventually someone is going to get it.”

As the beginning of the school year approaches, universities across the country are struggling with how to handle COVID-19 spread on campus. Several that planned to teach in-person classes—including the University of North Carolina at Chapel Hill, Columbia University and Michigan State University—have already moved to a format of all-virtual classes.

The Tuesday night party in York was hosted by students at York College, according to one student who said he attended the party.

York College administration released a video in response to the off-campus parties, urging students to follow social distancing measures at all times, both on and off campus.

“It’s also important that you follow these same guidelines when you are off campus, that you avoid coming together in large crowds or large groups,” said York College President Pamela Gunter-Smith in the video. “And in particular to our students that you avoid your normal ways in which you socialize on campus during the semester, especially on Jackson Street.”

Some students, however, said asking them to not socialize was not a realistic request.

“College kids, they like to party, obviously,” said Matthew Brewer, a York College student who is taking a semester off. “You’re not going to stop a bunch of college kids from going out.”

Brewer, who said he attended the party Tuesday night, said it was informal and held outdoors.

If there were an outbreak, Brewer said he would still go to parties, but wear a mask.

“You can make it fun. You can make it a theme. Mask party, you know what I mean,” Brewer said. “Put the little straw holes through there or something.”

There’s no way to separate college and social gatherings, Brewer said, especially for students living on or nearby the campus.

Whether those gatherings will affect the status of in-person classes remains to be seen.

Longtime bear David Rosenberg questions need for additional virus aid, suggests households are swimming in cash

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