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Oracle and TikTok struck a deal. What it is, none will say

UPDATED: Mon., Sept. 14, 2020

TikTok’s owner has chosen Oracle over Microsoft as its preferred suitor to buy the popular video-sharing app.  (Associated Press)
TikTok’s owner has chosen Oracle over Microsoft as its preferred suitor to buy the popular video-sharing app. (Associated Press)
By Matt O’Brien and Tali Arbel Associated Press Associated Press

The short-video app TikTok has chosen Oracle as its corporate savior to avoid a U.S. ban ordered by President Donald Trump. The U.S. government will review the prospective deal.

That much is known. Everything else is confusion, at least to outsiders. For instance:

• What does it mean that, as Oracle declared, it will become a “trusted technology provider” for TikTok? Is this a joint venture, a vendor agreement or something else? Oracle is pointedly not referring to its deal as a sale or acquisition.

• Will Trump approve such an arrangement after having threatened a ban if TikTok remains owned by its China-based parent ByteDance? Would it answer the national security concerns around potential data siphoning, censorship and propaganda from Beijing that Trump raised?

• Will the Chinese government go along with it?

• Will TikTok get kicked out of the major app stores after Sept. 20 when Trump’s threatened ban was supposed to go into effect, threatening its future in the U.S.?

“This whole process has been a mess,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics.

Microsoft, an announced TikTok suitor, said Sunday that its rejected bid would have protected U.S. national security interests by making “significant changes” to ensure security, privacy, online safety and anti-misinformation measures. Oracle’s statement Monday was more muted, emphasizing that it has a “40-year track record providing secure, highly performant technology solutions.”

U.S. Treasury Secretary Steven Mnuchin appeared to support the Oracle bid on CNBC on Monday. Oracle’s proposal made “many representations for national security issues,” Mnuchin said. He also noted a new commitment – by whom, he didn’t say – to make TikTok’s global operations a U.S.-headquartered company with 20,000 new jobs. Neither TikTok nor Oracle mentioned that pledge Monday, although TikTok said in July that it would add 10,000 U.S. jobs

TikTok said in a statement Monday that its proposal to the Treasury Department should “resolve the Administration’s security concerns” and emphasized the importance of its app to the 100 million users it claims in the U.S.

TikTok, which says it has about 700 million globally, is known for its fun, goofy videos of dancing, lip-syncing, pranks and jokes. It’s also home to more political material, some of which is critical of Trump.

An Aug. 6 Trump order threatened a vague ban on TikTok, creating a sense of emergency and seeding chaos into an existing national security review of TikTok by a U.S. interagency group, the Committee on Foreign Investment in the United States, or CFIUS. A subsequent Aug. 14 order demanded that ByteDance divest its U.S. business. In addition, Trump insisted that the U.S. government get a cut of any deal, something experts said was unprecedented

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