TikTok Oracle Deal Will Still Leave ByteDance As Owner
The clock is ticking for TikTok, or has already run out if you got just as confused as the US President himself. Either way, it seems that the social media sensation is close to finding a way out of its predicament, that is if its strategy with Oracle actually works. That deal hasn't even been approved yet and there is already a growing pushback against a structure that practically changes nothing in terms of who has control over TikTok.
The drama around TikTok's survival in the US has always revolved around national security concerns, warranted or not, due to the social network's ownership of ByteDance, a Chinese company with alleged ties to its government. US President Trump gave ByteDance an ultimatum to sell to a US company and give the US Treasury a big cut or get out of its territories. ByteDance turned down Microsoft's acquisition offer and it's probably because Oracle proposed a solution that didn't involve selling TikTok's US operations at all.
The deal will name Oracle as a "trusted technology partner", which, according to sources, simply means it will be able to audit TikTok's source code, updates, and technologies to ensure there are no backdoors for the Chinese government to exploit. Data for TikTok users in the US will also be stored in the US, ensuring that no other government other than the US has direct control over its citizens' data.
That, however, still leaves ByteDance with the majority stake in TikTok and, therefore, has direct financial control over its operations even in the US. Furthermore, the software and algorithms remain its property, something that would have been impossible for it to sell anyway since China updated its export laws. Long story short, nothing really changes in TikTok's structure and business, only that Oracle can check it isn't doing anything that could compromise the US' security.
The sentiment around this deal is reportedly quite negative, according to reports, though President Trump disclosed he has not yet been briefed on the matter. With the September 20 deadline just around the corner, time is running out for ByteDance and Oracle to convince legislators and authorities that this is really the only option, at least not without completely banning TikTok in the US.