Details of the deal between ByteDance and Oracle for TikTok are gradually emerging. According to The Financial Times, TikTok will be transformed into an independent company within the framework of the agreement. Oracle will also hold shares in this company.
This agreement will not separate TikTok regionally. However, an independent institutional structure will be established for implementation. Oracle will also own minority shares in this structure. The storage and processing of the data of users living in the USA in the USA in line with the recommendations of the Foreign Investment Committee will also be provided by Oracle.
TikTok’s headquarters have been in the US state of California for a very long time. This gives the social network a partial independence from ByteDance’s activities in China. The most important change brought about by the agreement is that Oracle owns shares in TikTok. It is currently unknown how much the share ratio is. Although Oracle’s partnership legally distances TikTok from ByteDance, it seems likely that algorithms developed and located in China will be needed in the new structure.
TikTok also pledged to recruit more in the US. Speaking to CNBC, US Treasury Secretary Steve Mnuchin stated that one of the ultimate goals of the agreement is to make TikTok “a US-based company”.
It remains unclear how this new deal will change TikTok’s operation. It is also among those wondering how much of the security concerns about TikTok can be resolved. Alex Stamos, Facebook’s former chief security officer, commented on the deal on his Twitter account saying: “It’s an agreement that Oracle takes responsibility without source code and no obvious operational changes to address concerns.”
The TikTok agreement between ByteDance and Oracle was made at the last minute to prevent the application from being banned in the USA. The agreement still needs approval from US President Donald Trump for it to be valid. Vital details are still unclear.