Kevin O’Leary is seen in Midtown Manhattan, Recent York City, on May 28, 2024.
James Devaney | Gc Images | Getty Images
Canadian investor Kevin O’Leary continues to be concerned about a TikTok deal, however it’s impossible under current law, he told CNBC, as President Donald Trump prolonged the deadline for a ban on the social media platform.
As a part of a wave of executive orders on Monday, Trump delayed by 75 days the imposition of a law that might effectively ban TikTok within the U.S., allowing for “a chance to find out the suitable plan of action.”
Trump had promised the move in a social media post on Sunday, also floating a deal that might see the platform, owned by China-based tech giant ByteDance, stay energetic under a three way partnership with a 50% American stake.
“That fifty/50 deal, I might like to work with Trump on, so would every other potential buyer … But the issue with a few of these ideas is that they are inconsistent with the ruling of the Supreme Court,” said O’Leary, widely known from his role in ABC’s “Shark Tank.”
The investor announced that he, together with “The People’s Bid for TikTok,” an effort led by Project Liberty Founder Frank McCourt, had offered ByteDance $20 billion in money to purchase the platform in an appearance on Fox News’ “America’s Newsroom.”
Talking to CNBC, he said the proposed deal didn’t include ByteDance’s TikTok algorithm, which has been a key point of scrutiny from U.S. lawmakers, adding that his group had its own alternative.
To ensure that TikTok to remain online under the Protecting Americans from Foreign Adversary Controlled Applications Act, or PAFACA, signed last 12 months, ByteDance needed to divest it by a Sunday deadline or see the ban come into effect.
TikTok temporarily went dark within the U.S. after the Supreme Court upheld PAFACA on Friday, but resumed service after Trump provided it with assurances.
McCourt confirmed to CNBC that the Project Liberty team remained “able to work collaboratively with the Trump Administration, ByteDance, and a consortium of American partners” to finalize a deal and keep TikTok online.
“Project Liberty has a proven tech stack that’s already in use and offers a transparent path to handle the national security concerns of Congress while keeping TikTok operational,” he added.
Legal hurdles
Firms involved with TikTok have had differing reactions to Trump’s executive order. Service providers reminiscent of Oracle and Akamai have willingly kept TikTok online, while Apple and Google are yet to revive ByteDance-owned apps on their stores.
Based on O’Leary, while Trump’s ban extension has likely lent protection to the likes of Oracle and Akamai, it’s unclear if ByteDance’s deadline to divest can be prolonged.
“What we’d like will not be really a 75 day extension. What we’d like is to return and ask congress to open the order and supply for these latest options, because they are not provided for without delay,” he said.
“I might like to do a deal, if the law provided for it, but I do not have the luxurious of breaching the order of Congress,” he added.
Law experts who spoke to CNBC agreed that the legal status of TikTok and Trump’s executive order remained uncertain and that any efforts to make a deal for the platform could face challenges.
“The Order doesn’t appear to comply with the statute. Congress rigorously included certain dates and procedures within the law, which SCOTUS found to be constitutional,” said Carl Tobias, a law professor on the University of Richmond.
“Thus, a federal court could find that the Order violates the law and invalidate it,” he said, noting, nevertheless, that such an motion could take a protracted time if the federal government appealed to the Supreme Court.
Sarah Kreps, the director of the Tech Policy Institute at Cornell University, agreed the manager order was not consistent with the Supreme Court’s decision, adding that it said nothing about progress toward a certified divestiture.
On condition that violators of the TikTok ban could face billions in fines, it isn’t entirely prudent for parties to take Trump’s assurances over the law and SCOTUS’s ruling, Kreps said.
“They’re actually gambling with the law and putting considerable faith in executive authority,” she added.
China softens stance?
In March last 12 months, O’Leary told CNBC that TikTok could fetch $20-$30 billion in the marketplace, an enormous discount, given any sale would likely exclude the platform’s algorithms.
As a substitute, the worth in a possible deal was the chance to achieve the strong domestic brand of TikTok and its over 100 million users, he said.
Across the time conversations a few TikTok sale ramped up, the Chinese government was seen as a significant barrier to a ByteDance divestment.
Beijing, nevertheless, recently signaled openness to a deal that might see U.S. firms gain ownership of the platform.
“In relation to actions reminiscent of the operation and acquisition of companies, we consider they must be independently decided by firms in accordance with market principles,” a Beijing spokesperson told reporters Monday when asked about President Donald Trump’s TikTok proposal.
Based on O’Leary, any potential sale of ByteDance continues to be expected to be negotiated between Trump and Chinese President Xi Jinping.
“With TikTok, I actually have the appropriate to either sell it or close it, and we’ll make that determination and we could have to get an approval from China too,” Trump told reporters following his inauguration.
While signing the manager order, the President reportedly suggested that he could impose tariffs on China if Beijing did not approve a U.S. take care of TikTok. On Monday stateside, he also said he would consider the likelihood of Tesla CEO Elon Musk or Oracle Chairman Larry Ellison buying the platform.
Meanwhile, O’Leary told CNBC that he was in Washington still working on a possible TikTok take care of U.S. lawmakers.
