ByteDance is accused of colluding with Oracle to block legitimate acquisition offers for TikTok's US operations.
ByteDance is accused of colluding with Oracle to block legitimate acquisition offers for TikTok's US operations and effectively allocating the short video social media market between itself and Oracle, according to a lawsuit brought today by a group of American investors.
TikTok Global, a Florida limited liability company, said in a complaint that they sought to address national security concerns head-on by acquiring TikTok's US operations and severing them from Chinese control.
However, Oracle colluded in a “ruthless scheme that shackled trade” and its “calculated ploy” preserved defendants' grip on TikTok. This was an overt defiance of national security directives, said the complaint, filed in the Southern District of Florida.
The defendants named in the complaint are Beijing Telecommunications, ByteDance and subsidiary TikTok Inc., as well as ByteDance’s former chief executive officer Yiming Zhang.
Defendants are accused of having engaged in market allocation and division. The complaint alleges that ByteDance maintained control over TikTok's US operations through a “sham partnership” structure, effectively allocating the US short video social media market between itself and Oracle while excluding other potential acquirers such as the plaintiff.
The complaint also alleges a group boycott in which ByteDance conspired to boycott TikTok Global’s legitimate acquisition offers.
“Despite Plaintiff TG submitting offers of $33.3 billion and later $58 billion in compliance with all CFIUS requirements, ByteDance refused to respond to or negotiate with TG, instead pursuing the non-compliant Oracle partnership,” the complaint said. “This boycott was designed to prevent TG from competing for the acquisition of TikTok's U.S. operations.”
ByteDance is also accused of bid rigging and trying to manipulate a review process by the Committee on Foreign Investment in the US (CFIUS) to ensure Oracle's selection as the "trusted technology partner" while suppressing TikTok Global’s compliant $33.3 billion bid from September 2020.
“ByteDance and Oracle engaged in a concerted refusal to deal by refusing to respond to or negotiate with TG regarding its CFIUS compliant acquisition agreements for consideration totaling $33.3 billion and later $58 billion... instead pursuing the non-compliant Oracle partnership in furtherance of their conspiracy,”
the complaint alleged.
“Their actions were nothing short of a deliberate assault on free competition,”
the lawsuit said.
Aside from alleging an unlawful conspiracy in violation of Section 1 of the Sherman Act, the complaint also alleges tortious interference, unjust enrichment and violation of the Florida Deceptive and Unfair Trade Practices Act. TikTok Global seeks injunctive relief to compel defendants to cease and desist from further racketeering acts.
It also seeks a favorable decision requiring ByteDance to divest TikTok's US operations to the plaintiff, awarding unspecified damages for lost business opportunity and banning the defendants from continuing their anticompetitive conduct.
Source: MLex
