TIKTOK appears to have dodged a ban in the United States after data-management powerhouse Oracle agreed to buy the app’s US operations over the weekend, according to reports.
The Chinese app’s parent company ByteDance spent weeks negotiating a deal with cash-flushed tech firms after President Donald Trump ordered the sale last month and threatened to shut down TikTok in the US.
Citing national security concerns as the drive for the imminent ban, Trump had set a deadline of September 15 to complete the deal.
The Trump administration alleged that TikTok would have to hand over the data of its 100million US users if asked to by the Chinese government.
TikTok has repeatedly denied the accusations, stating that it has never given US user data to Beijing, “nor would we do so if asked.”
After talks with Twitter and Microsoft fell through, ByteDance has reached an agreement with Oracle, NBC News reported Sunday.
Sources close to the talks said that while a partnership had been formed, the deal still faced several hurdles before completion.
People familiar with the matter told Reuters that ByteDance hopes the partnership will spare it a US ban while appeasing China.
TikTok is best known for dancing videos that go viral among teenagers and has more than 500million users worldwide.
Its run-in with Trump turned ugly when ByteDance last month threatened to sue the US government over the President’s executive order to force a sale.
Sale negotiations were later upended when China updated its export control rules, giving it a say over the transfer of TikTok’s algorithm to a foreign buyer.
Reuters reported last week that China would rather see TikTok shut down in the United States than allow a forced sale.
On September 7, China’s state-run English television channel CGTN cited sources as saying ByteDance will not sell TikTok’s US operations to Oracle or Microsoft, and will not give the source code for the platform to any US firm.
Under Bytedance’s latest proposal, Oracle will be the firm’s technology partner and assume management of TikTok’s US user data, sources told Reuters and NBC News on Sunday.
TikTok: Brief guide to the world’s most downloaded app
- TikTok lets users create and share short videos with music and camera effects
- The hit app is best known for short dance videos, lip-syncing clips, comedy sketches, and talent footage
- It is owned by Beijing-based ByteDance, founded by the entrepreneur Zhang Yiming
- The $200billion conglomerate acquired the Musical.ly app in 2017 and merged it with TikTok, bringing millions of new users
- By February 2019, TikTok and Douyin had been downloaded more than a billion times
- It was the most-downloaded app on the App Store in 2018 and 2019
- Cyber experts have expressed concern over ByteDance’s alleged links to the Chinese government
- The Department of Defense has urged its employees to avoid using the app over national security concerns
- TikTok says it does not and would not share user data with the Chinese government
The data is currently stored in Google parent company Alphabet’s cloud.
Oracle is also negotiating taking a stake in TikTok’s US operations, sources said.
Some of ByteDance’s top investors, including General Atlantic and Sequoia, will also be given minority stakes in those operations, one of the people said.
It is unclear whether Trump, who wants a US technology firm to own most of TikTok in the United States, will approve the deal.
The Committee on Foreign Investment in the United States (CFIUS), which reviews deals for national security risk, is overseeing the ByteDance-Oracle talks.
ByteDance and Oracle did not respond to requests for comment. The White House declined to comment.
Based in Redwood City, California, Oracle is a data management firm with significant technological prowess in handling and safeguarding data.
However, the company has no social media experience as its clientele comprises companies, rather than consumers.
Peking University professor of investment Jeffrey Towson said Oracle’s ownership of TikTok’s U.S. operations with access but not ownership of ByteDance’s core technology mirrored how many Western companies, such as Facebook, operate in China.
Earlier on Sunday, Microsoft said ByteDance had informed it that it would not be selling it TikTok’s U.S. operations. The firm had been the front-runner to land a deal due to its experience with consumer technology.
Walmart, which had joined Microsoft’s bid, said it was still interested in investing, and that it would talk further with ByteDance and other parties.
The White House has stepped up efforts to purge what it deems “untrusted” Chinese apps from US digital networks.
Trump signed two executive orders last month targeting TikTok and ByteDance.
The first, effective Sept. 20, bans U.S. companies from transacting with them. The second requires ByteDance to sell TikTok by Nov. 12.
Were Trump to agree to ByteDance’s proposed Oracle deal, he would have to rescind his order calling specifically for divestment.
Beyond TikTok, Trump has also issued an order prohibiting transactions with Tencent Holding Ltd’s messenger app WeChat.
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In other news, a horrifying clip of a man committing suicide went viral on TikTok last week.
TikTok was last month caught collecting private user data for over a year in a brazen breach of Google app rules.
And here’s a profile of Charlie D’Amelio, the dancing Connecticut teen who is currently the app’s mos popular user.
What do you think of the TikTok fiasco? Let us know in the comments!
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