Politics Oracle, TikTok, and the Trump administration have reportedly 'tentatively' reached a deal. Here's everything we know about the partnership that could save TikTok from Trump's threats of a US ban.
Meadows Warns Any TikTok ‘Repackaging’ Won’t Meet U.S. Goals
White House Chief of Staff Mark Meadows said he’s concerned that Oracle Corp.’s bid for the Chinese-owned video app TikTok may be a “repackaging” that won’t meet President Donald Trump’s goals. © Bloomberg Oracle Corp. headquarters campus stands in Redwood City, California, U.S., on Tuesday, Aug. 18, 2020. Oracle Corp., the worlds second-largest software maker, is weighing a surprise bid for part of TikToks business, seeking to rival Microsoft Corp. in the race to acquire the viral video streaming app, according to people familiar with the matter.
- The Treasury Department, ByteDance, and Oracle on the terms of a deal in which Oracle would become TikTok's "trusted technology provider" in the US.
- No details have been made official, but reports indicate the deal is a far cry from President Donald Trump's early demands that TikTok's Chinese parent company sell off its US operations.
- According to CNBC, Oracle will take in a US-headquartered TikTok entity, and will host millions of users' data.
- However, the deal is facing roadblocks: The Trump administration of TikTok, and government officials are about China's access to the user data.
- Here's what we know, what's been reported, and what questions we still have about the deal between TikTok and Oracle.
The US government's national-security review boardon terms for a deal between Oracle and TikTok's parent company, ByteDance, on Thursday.
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Oracle, best known as the leading provider of database software and a $187 billion tech titan in its own right,the Beijing-based ByteDance has chosen to resolve the matter. But the company emerged as the winner this weekend, after that its bid for TikTok was turned down.
Both Oracle and TikTok have confirmed submitting their joint deal to the US government for approval, with TikTok saying it believed the deal "would resolve the administration's security concerns." The deal's approval was expected earlier this week. However, recent questions over the deal's terms and its ability to adequately protect American users' data from China have caused the process to drag on.
Hillicon Valley: Trump's ban on TikTok, WeChat in spotlight | NASA targeted by foreign hackers | Instagram accused of spying in lawsuit
Welcome to Hillicon Valley, The Hill's newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley. If you don't already, be sure to sign up for our newsletter with this LINK.Welcome! Follow our cyber reporter, Maggie Miller (@magmill95), and tech reporter, Chris Mills Rodrigo (@chrisismills), for more coverage.ALL ABOUT TIKTOK: The Trump administration announced Friday that it will ban WeChat and TikTok from U.S. app stores starting Sunday.The order is a significant escalation against the two Chinese-owned apps that have massive user bases in the U.S.
Other than that, few details about the deal — or what it means for US-China tensions — have been revealed.
What has been confirmed
- TikTok and Oracle have confirmed that the companies made a deal in which Oracle is named a "trusted technology provider." Treasury Secretary Steven Mnuchin also confirmed earlier this week that ByteDance and Oracle had submitted the deal to the US government for review.
- that under the proposed deal, ByteDance committed to establish TikTok as a US-headquartered global company and create 20,000 new jobs.
- Donald Trump told reporters Wednesday night he was " " on the proposed deal because he hadn't been briefed yet, but said he wouldn't support it if ByteDance had majority ownership of TikTok.
- Although that the Treasury Department be paid a cut of whatever deal ByteDance made. However, he discovered, "you're not allowed to do that — you're not allowed to accept money."
What is reported
- Under the deal, the global business for TikTok — which has more than 2 billion worldwide installs outside China — would be placed into a new US-headquartered entity, . The new entity would have ByteDance as the majority shareholder and Oracle as a minority shareholder, .
- However, the Trump administration has raised concerns about ByteDance's continued majority ownership under the deal. he was pushing for US majority ownership before signing off on a deal.
- Other interested US investors — including Sequoia Capital, General Atlantic, and, potentially, — would be able to buy minority stakes in the new entity, according to .
- The new TikTok entity would have "independent oversight" and be managed "at arm's length" by ByteDance, the Financial Times reported.
- One concern was whether TikTok under the deal. The Financial Times reported that TikTok would continue to have access to the recommendation algorithm surfacing videos on users' For You pages. This would avoid any questions over the transfer of ownership of the algorithm to a US buyer, sidestepping a thorny issue with Chinese regulators.
- Oracle would reportedly take over management and processing of TikTok's user data either or — though Reuters and the Financial Times report different possibilities.
- Although the deal aims to address the US government's national-security concerns, at the deal to ensure China-headquartered ByteDance can't access the data belonging to TikTok's American users.
- Instead of an outright deal, the Oracle-TikTok relationship would be more of a "partnership" without the "exchange of significant assets," The Wall Street Journal first reported.
What we don't know
- We don't know why ByteDance's deal with Microsoft, which seemed sure for weeks, fell apart. that investors were unhappy with the price Microsoft offered and that it upset ByteDance CEO Zhang Yiming by characterizing TikTok as a security concern that only it could fix.
- The Committee on Foreign Investment in the US — which reviews transactions between foreign and American companies and declared last month that ByteDance had to divest its US operations — was set to review the proposed deal this week.
- Thursday that ByteDance, Oracle, and the Treasury Department (which oversees CFIUS) had "tentatively agreed" on terms for the deal.
- If the committee approves the deal, President Donald Trump will have to sign off on the details. On Tuesday, Trump said he had " " for the Oracle cofounder Larry Ellison, without elaborating.
- The Chinese government will also have to agree to the terms before the deal is official. The Financial Times reported that Chinese officials had already shown support for the Oracle deal, which appears to let ByteDance retain significant control.
- , along with , have urged the committee and the president to reject the deal, arguing it is too lenient and doesn't do enough to assuage national security concerns.
- If the deal is rejected, it could send negotiations back to square one, with threat of a ban still looming over TikTok.
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China Threatens to Kill TikTok Deal Over ‘Dirty’ Trump Tactics .
Just a few days ago, the TikTok deal looked like a win for China. Now its state-run media are denouncing it as “an American trap” and a “dirty and underhanded trick.” © Bloomberg The TikTok logo is displayed on a smartphone in front of the national flag of China in this arranged photograph in London, U.K., on Monday, Aug. 3, 2020. TikTok has become a flash point among rising U.S.-China tensions in recent months as U.S. politicians raised concerns that parent company ByteDance Ltd.