President Donald Trump has ordered Tiktok’s Chinese-based Mother Bite Dance to turn off its August 6 operation, citing concern that Tiktok, a popular short – term video app that has more than 100 million users, is gathering information from its U.S. community. The deal should have been announced by September 15, otherwise the app, which is very popular among teenagers, will be banned from the states.
Administration says Oracle’s proposed bid for Tiktok is not enough to protect US users
Although the deal is closed, Secretary of State Mike Pompeo and other administrative officials are concerned that Bite Dance could gain access to user data from its 100 million US users. In addition, although the deal provides access to Oracle for Tiktok’s source code and updates, it is concerned about the potential impact of the restructured company on China; This will prevent Byte Dance from using a back door to snatch user data.
The U.S. government has until Sept. 20 to decide whether to approve the Tiktok restructuring. This will allow them to diversify their interest in the Bite Dance app and turn it into an independent company. Oracle and other U.S. companies retain minority interests within the company. Under the terms of the deal, the new Tiktok will be the headquarters of states with an independent board approved by the U.S. government. The company will be overseen by a third party reporting to the U.S. government.
Attorney General William Barr, who briefed the House today on the deal, said other government officials studying the proposal were also reviewing it. Treasury Secretary Steve Munchin, who is reviewing the possible deal, is also involved. According to a pair of sources, Barr spoke to an Oracle executive this morning and Pompeo met with Oracle last week.
Yesterday, members of the U.S. Committee on Foreign Investment (CFIUS) joined; The agency approves foreign investment in U.S. assets, exploring possible national security issues. During the meeting, there were issues and concerns about leaving Bite Dance with the majority of the U.S. operations in Tiktok, and Oracle has only a minority stake. The group of officials was scheduled to meet today. If the transaction is completed, Oracle will store user data belonging to U.S. TicTac users, but this information was never stored in China and is stored on servers in the US and Singapore.
The bottom line is that as long as Bite Dance maintains financial control of Tiktok, Tiktok will still be a national security threat. The Oracle related deal submitted to CFIUS is less than protecting U.S. youth and those loyal to the app. Senator Marco Rubio and five other Republicans wrote a letter to the president today, telling Trump that the deal had “significant unresolved national security issues.”
Others want to see the complete sale of U.S. operations in Tiktok in line with the executive order signed by President Trump on August 6. Instead, to re-emphasize, the plan, announced last weekend, will allow Bite Dance to keep up with most of the operations, and Oracle is simply a “major technology partner.” For example, Oracle does not have an important algorithm developed by Tiktok to determine which videos are shown to users. But China created a new regulation prohibiting the handing over of Chinese-made algorithms to foreign companies. This puts a strain on any option of selling Tiktok outright to a U.S. company.
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