The Trump administration works on a radical level to restructure Tiktok’s property, placing Oracle and a group of American investors at the center of its global operations, by NPR.
The effort comes as Washington increases efforts to respond to concerns about the links of popular video sharing application with China and the potential national security risks associated with its property by Bytedance based in Beijing.
As part of the plan, Bytedance would retain a minority participation in Tiktok, but Oracle would take control of its algorithm, data collection and software updates, guaranteeing compliance with American security standards. American investors would hold a majority participation, effectively diluting Chinese influence in the company.
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Although the conditions remain in flow, the officials hope that the agreement will satisfy the legislators and will facilitate public concerns concerning the continuous presence of Tiktok in the United States
Oracle, which already provides the backbone of Tiktok’s web infrastructure, would play a central role in the operations of the application under the proposed agreement. The interest of the company for Tiktok is not new; In 2020, Oracle and Walmart tried a similar takeover, with the blessing of Trump. This agreement collapsed on prices and regulatory obstacles, but Oracle has maintained its interest, which would have looked at a participation evaluated in “tens of billions” of dollars.
Other technological companies, including Microsoft, are also involved in discussions. Walmart, however, has moved away from current negotiations, citing the estimated assessment of Tiktok of $ 200 billion, which is far beyond its financial scope.
Bytedance’s minority participation would ensure a certain continuity for Tiktok, but the American government insists on strict guarantees to prevent Chinese interference.
A member of the congress involved in negotiations said: “A key element shows that there is no operational relationship with Bytedance, that they do not have control. There should not be rear berries where China can potentially access. »»
Negotiations come in the context of a law adopted by the Congress and confirmed by the Supreme Court, forcing Tiktok to execute a “qualified divestment” of Bytedance before January 19, 2024. Although this deadline was adopted, Trump delivered An executive decree granting a 75 – day extension.
The controversy surrounding Tiktok stems from longtime fears that the Chinese government can use the application to access the data of American users or manipulate its algorithm. Project Texas, a proposal developed during the Biden administration, sought to respond to these concerns by storing Tiktok data in the United States and taking charge of its surveillance.
While Project Texas gained momentum, he ultimately failed to guarantee Tiktok’s independence against Bytedance. Sarah Kreps, an expert in technology and foreign policy in the Brookings Institution, noted the challenges.
“The question that has always been difficult to answer is how you prove a negative?” How do you prove the lack of Chinese data control and algorithm? She asked.
The collapse of Project Texas led Biden and Trump administrations to put pressure for a more complete solution, including divestment.
Beijing
In a surprising turning point, Chinese regulators reported that they did not oppose a sale of Tiktok. While Beijing has historically resisted the foreign acquisitions of its technological societies, recent declarations suggest a more pragmatic approach. Observers believe that China can consider sales as an opportunity to negotiate commercial concessions with the United States, especially in the area of prices.
Despite this apparent flexibility, Beijing is unlikely to give up control of the central algorithm of Tiktok, which is considered a jewel of Chinese technology. Experts provide that any agreement will imply complex license agreements to maintain a certain level of Chinese intellectual property rights.
Trump’s vision of an American 50% game
Trump’s repeated statements that the United States should have a 50% stake in Tiktok have generated confusion. Some interpret this as a call for partial nationalization, while others think that it pleads for majority participation by American private investors.
“No one seems to know what he means with comments on actions at 50%,” said a familiar source with negotiations, quoted by NPR.
Tiktok’s precarious situation has also affected his relationship with the main technological platforms. The application was temporarily deleted from the Apple and Google Play app store, moving for 14 hours. None of the two companies has restored Tiktok, depriving it of critical software updates and new downloads from American devices.
Oracle has restored Tiktok’s web services, citing political insurance from the Trump administration. However, Apple and Google remain cautious, distrusting legal risks associated with the management of an application still partially controlled by Bytedance.
Kreps added: “Oracle just has more confidence in Trump’s political insurance. For Apple and Google, yes, they were invited to the inauguration last week, but where are things next week? “”
The fate of Tiktok is based on the congress, where the legislators remain skeptical about any agreement which allows Bytedance to maintain participation in the company. Negotiators must find a balance between eating legislators and satisfy Bytedance and its investors.
A key challenge will be to guarantee compliance with national security requirements. As a member of the Congress pointed out: “the binding legal agreements guaranteeing in Bytedance cannot secretly handle that the application will prove to be critical to gain the approval of the legislators”.
