TikTok is reported to not be for sale, neither to Microsoft or to Oracle. Chinese regulatory issues may block any sale that includes TikTok’s technology. Yet Oracle did confirm today that a deal is happening.
Oracle has confirmed that comments by Treasury Secretary Mnuchin that deal between Oracle and TikTok is being worked out.
According to a press release:
“Oracle confirms Secretary Mnuchin’s statement that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider. Oracle has a 40-year track record providing secure, highly performant technology solutions.”
The report on an Oracle deal is that Oracle will be in charge of TikTok’s U.S. data.
But another report from China says no outright sale is happening.
TikTok Will Not Sell
According to reports from the China Global Television Network, unnamed sources confirmed that TikTok will not be selling it’s United States business or it’s technology to any United States business.
The news comes literally a day before the September 15 TikTok ban deadline set by the White House executive order to begin identifying ways to ban “transactions” with ByteDance.
TikTok Acts to Remain Independent
Recent activities on the part of TikTok indicates that it may be proceeding with a strategy to not sell the United States operations.
TikTok Sues United States Government
TikTok is suing the United States government to keep things as they are.
According to TikTok, the United States government already knows that TikTok shields user privacy and information against the Chinese government.
TikTok passed national security scrutiny as part of its acquisition of Musical.ly.
United States Government Previously Approved TikTok
The United States government gave TikTok approval for its privacy and data security.
“These actions were made known to the U.S. government during a recent U.S. national security review of ByteDance’s 2017 acquisition of a China-based company, Musical.ly.
As part of that review, Plaintiffs provided voluminous documentation to the U.S. government documenting TikTok’s security practices and made commitments that were more than sufficient to address any conceivable U.S. government privacy or national security concerns…”
According to TikTok:
“”The executive order seeks to ban TikTok purportedly because of the speculative possibility that the application could be manipulated by the Chinese government.
But, as the U.S. government is well aware, Plaintiffs have taken extraordinary measures to protect the privacy and security of TikTok’s U.S. user data, including by having TikTok store such data outside of China (in the United States and Singapore) and by erecting software barriers that help ensure that TikTok stores its U.S. user data separately from the user data of other ByteDance products.”
The lawsuit is strong evidence that TikTok seeks to defeat any ban and to remain operating as it has in the past.
TikTok Transparency Hub
TikTok publishes a Transparency Hub that details everything TikTok does to ensure user safety and protect user privacy.
According to TikTok:
“Our virtual experience shows visitors how we store TikTok user data in the US and safeguard that data from hackers and other threats with encryption and the latest technology.
We also detail how we work with industry-leading third party experts – the same ones used by the federal government – to test and validate our security processes.”
Chinese Government Blocks TikTok Sale to United States
The Chinese government has stepped in to effectively block or at least slow down a sale to any United States business entity.
At the end of August, China’s Ministry of Commerce and the Ministry of Science and Technology issued prohibitions and regulations on sales of specific technologies.
New Chinese government prohibitions against the export of AI and push technology effectively slows down a sale of TikTok’s United States prohibitions.
In order to proceed, TikTok would first have to obtain a license from the Chinese government. Without that license, it may be impossible to proceed with any sale.
According to the reports:
“”The newly-added article 21 over ‘personalized information push service technology based on data analysis’ and article 18 about ‘artificial intelligence interactive interface technology’ may have something to do with ByteDance,” Cui noted.
“If ByteDance plans to export related technologies, it should go through the approval procedures… it is recommended that ByteDance… carefully consider whether it is necessary to suspend the substantive negotiation of related transactions before performing the statutory declaration procedures…”
The Future of TikTok
Reviewing the actions taken by TikTok to remain in the United States plus the actions of the Chinese government to stop or at least slow down a sale, it appears that no sale was going to happen in the short term.
A sale to a United States entity may still occur.
But TikTok has previously passed security reviews during it’s acquisition of Musical.ly. It remains to be seen if TikTok will be able to successfully litigate its way out of a banning or given a chance to prove that user privacy and information is shielded from Chinese government entities.
Given the well-documented security and privacy measures already in place, TikTok believes it may be able to punch its way out of the corner it’s been backed into by the governments in China and the United States.
Citations
Oracle Confirms a Deal with TikTok
https://www.prnewswire.com/news-releases/oracle-confirms-statement-301130173.html
CGTN Reports TikTok Not for Sale
ByteDance Not to Sell TikTok’s U.S. Operations to Microsoft or Oracle: Sources
Chinese Government Updates Technology Export Rules
White House Executive Order on TikTok
Wall Street Journal (Paywall)
Oracle Wins Bid for TikTok in U.S., Beating Microsoft
