TikTok says no to Microsoft, but what about Oracle?
Sep 15 2020
The Government worries about user data being funnelled to Chinese authorities.
TikTok faced a ban in the United States due to an executive order from the president, Donald Trump, due to national security concerns. It is not clear if Oracle's deal will include a kickback.
Oracle has nurtured a relationship with Trump since before his administration began.
First, Microsoft announced that it was not acquiring TikTok.
ByteDance has also reportedly applied for a licence to operate a digital bank in Singapore.
Microsoft added it was "confident our proposal would have been good for TikTok's users, while protecting national security interests". Just before Oracle was announced as the victor of the contest, Microsoft said that it had been informed by ByteDance that TikTok would not be sold to the software giant. TikTok declined to comment. Republican and Democratic lawmakers have raised concerns about censorship and children's privacy. Trump had threatened to ban the social media video-sharing application in the United States without a change in ownership.
Controversially, Trump has demanded that the U.S. government get a cut of any deal, which critics contend appears unconstitutional and akin to extortion. Instead, the technology partner in the USA will be required to develop a new algorithm for the short-video app, the reportsaid.
Worries that the Chinese government can access such data is unfounded, TikTok has long said, claiming that government officials in Beijing have never asked for data on Americans and if such a request were made, the company would deny it.
The Beijing-based ByteDance wants to structure the deal as a partnership rather than an outright sale amid political tension between China and the White House, Reutersreported this morning, citing people familiar with the negotiations.
It remains unclear whether Trump, who wanted a USA technology company to own most of TikTok in the United States, will give it the green light.
Subscribe now to stay ahead with the most trusted business news source. The 43-year-old company is expanding from its database provider roots and attempting to build up the cloud service and consumer-data businesses. Oracle, which does not now have any consumer-facing operations, is looking to broaden its client base by building up its cloud services and consumer-data businesses.
Sources told the Financial Times that Oracle was working with a group of investors that already own a stake in ByteDance, including General Atlantic and Sequoia Capital. "It doesn't make any sense", he said.
Experts said TikTok's recommendation algorithm would fall under this list.
Oracle co-founder Larry Ellison a public supporter of the president, Donald Trump. Notably, CEO Safra Catz was a member of Trump's transition team.
However, on the record, Microsoft had said it was seeking to buy the assets of TikTok in North America, Australia and New Zealand.