While on hold indefinitely, the deal between TikTok and Oracle may well finally take place. In this way, the data of American users of TikTok would be hosted by an American company.
Washington suspects TikTok of leaking information to Beijing
The subsidiary of ByteDance indeed fears the American regulators and seeks to appease them by signing an agreement with a company based in the United States. As explained The Vergethis solution is called “ Project Texas within the Chinese company, due to Oracle’s headquarters being based in the city of Houston in the largest US state.
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The tumultuous relationship between TikTok and the United States is not new. In the summer of 2020, President Donald Trump announced that he wanted to ban the application on American soil because of the supposed proximity between his parent company and the Chinese government. The authorities feared that the personal data of American TikTok users could be delivered to Beijing. For Trump, the condition for the social network to continue operating in the United States was that its American activities be acquired by an American company.
Initially, Microsoft was approached to take care of it but it is finally Oracle which was chosen. However, the Chinese firm has repeatedly appealed against the decision of the American authorities, putting the transaction on hold until in December 2020, a judge prevented the Trump administration from going through with its idea. under the International Emergency Economic Powers Act (IEEPA).
Once in power, Joe Biden put an end to his predecessor’s last procedures to ban TikTok on American soil.
Since 2020, US authorities have been wary of TikTok. Photography: Caleb Fisher / Unsplash
A deal with Oracle to ease tensions
Today, the trade war between the United States and China is still relevant and finally, the Democratic president seems to be following in the footsteps of Trump in relation to his policy against the Middle Kingdom. The Committee for Foreign Investment, a cross-departmental organization of the US administration responsible for analyzing corporate acquisitions, which was the source of concerns about TikTok in 2020, has not really changed. opinion and even reiterates.
This time, ByteDance intends to react well in order to prevent things from escalating; it therefore wishes to make an agreement with Oracle. According to Reuters, the deal is close to being completed and would allow the cloud provider to store US user data on its own servers. In addition, an American team of hundreds of people specialized in data management will also be responsible for isolating Americans’ information from ByteDance. The two companies are currently discussing a structure in which this team would operate autonomously and would not be under the control or supervision of TikTok.
For the time being, however, it is not known whether the Committee for Foreign Investment will accept this agreement, and whether it will comply with the IEEPA.
Why is ByteDance playing the game?
The American market is very juicy for TikTok, which could explain why ByteDance seems, this time, to go in the direction of Washington. In 2020, a survey showed that American teenagers preferred the Chinese application to Instagram, yet a social network made in the USA.
TikTok is now one of the most popular social networks in the world, and it stood out last August by becoming the most downloaded application. For its part, ByteDance is one of the fastest growing companies globally, with a valuation that fluctuates between 325 and 450 billion dollars. If she wants to continue on her way, it is better not to make too many waves…