TikTok lives to see another day in the US
22nd September, 2020
American President Donald Trump has given his 'blessing' to a deal between Oracle and ByteDance owned video-sharing app TikTok. This prompted the US Department of Commerce to give TikTok a one week reprieve from getting banned in the country.
The proposed deal between Oracle and ByteDance involves setting up a new company called ‘TikTok Global’, 20 per cent of which will be held cumulatively by Walmart and Oracle. The remaining 80 per cent will be owned by ByteDance. It's being said that the new company will be headquartered in America and will add 25,000 new jobs to the economy. The fine details of the deal have not been clarified by either company yet. According to sources, Oracle will become a 'trusted tech partner' and will host all the US user data on its own servers. ByteDance maintained its claim that the deal doesn't involve any transfer of algorithms to TikTok Global.
The Trump administration had been targeting TikTok's US operations over security concerns since July. In an interview with Fox News, Secretary of State, Mike Pompeo, has said that the USA was considering a ban on TikTok because the app could give China access to US user data. Following this, two executive orders signed by Trump in August effectively banned American companies from doing business with ByteDance apart from forcing the sale of TikTok. The executive order cited, "TikTok's data potentially allows China to track the locations of federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage."
In response, TikTok had filed a lawsuit against the US government alleging that the administration didn't allow it to respond to the national security concerns cited as the reason for the potential ban. TikTok repeatedly claimed that none of its data is subject to Chinese laws. They also said that US user data is stored within the country itself with a backup in Singapore, but this answer didn't quell the concerns of the government.
In a separate lawsuit, TikTok employees are suing the government over loss of their livelihoods as affected by the ban.
Technical policy expert Betsy Cooper, Director of the Aspen Policy Hub told CNet, "It's unclear how much effort the administration would put into actually investigating the seriousness of the specific security concerns with the app versus using this as a threat for broader geopolitical advantage."
For now, the deadline for the app to be removed from the app stores has been extended to September 27 allowing Oracle, Walmart, and ByteDance to work out the proposed deal. The government still holds the option of negating the deal if it finds any potential 'red flags'.
Sources: BBC, Times of India, New York Times
Edited by Varun Paleli Vasudevan