Yahoo Finance's tech editor Dan Howley joins The First Trade to discuss the latest in the legal battle between TikTok's parent company ByteDance and the U.S. government.
ALEXIS CHRISTOFOROUS: A victory for TikTok. A federal judge blocked an attempt by the White House to ban downloads in the US just hours before that ban was expected to take effect. The ruling gives parent company ByteDance more time to get approval from the US and Chinese government for a pending deal with Oracle and Walmart.
Now, this is the second time in just a week that the US courts have struck down attempts by the Trump administration to block Americans' access to Chinese-owned apps. Last week, you'll remember, a US magistrate judge stopped a ban on the popular messaging app WeChat after a group of the app's users sued the US government.
Our tech editor Dan Howley is here with more. Hey, good morning, Dan. So what's the latest on TikTok and that ban being lifted, at least for now?
DAN HOWLEY: Yeah, so this is a ban that's going to be lifted indefinitely now, according to the judge who made this ruling. Basically, what's still going on behind the scenes is the ownership structure of TikTok still very much in flux. Basically, the US government doesn't want the Chinese government to have any kind of majority control.
They basically assume that ByteDance and the Chinese government are one and the same, so they want to make sure that US entities have a larger stake in it. Right now it would be about a 20% stake that Oracle would have and Walmart, and then the rest would likely go to ByteDance. The US government has said that ByteDance, Chinese entities wouldn't have any ownership. Then ByteDance is saying they would have 80% ownership.
So there seems to be a large disconnect still between the talks and between the different parties. As far as when this gets wrapped up, we still have no idea. A full ban could go into effect November 12.
That's really when it would become virtually unusable, the app, in the US. But we're still a month or so away from there. And we don't know exactly what the two parties are planning in the meantime.
BRIAN SOZZI: Dan, does-- do you think this decision emboldens the folks at ByteDance to not go through with the deal with Oracle and Walmart?
DAN HOWLEY: No, no. I think they're-- they're going to want to go through it-- through with it because of that November 12 ban. And they'll just continually see this kind of back-and-forth with the US government. I think, obviously, this is a sticking point for some of the China hawks in DC, especially in the Trump administration. I think that's going to continue to be an issue for them. So I don't think that ByteDance or TikTok are going to back down or rather kind of just kind of try to circumvent the ban at all.
ALEXIS CHRISTOFOROUS: All right, Dan Howley, we're going to continue to watch this TikTok saga unfold. Thank you.