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TikTok Associates with Oracle while Microsoft Loses the Bidding Battle

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Tiktok and Oracle join hands in the US, and the deal aims at satisfying President Donald Trump’s concerns regarding national security and citizens’ privacy. All these concerns and doubts arise from Tiktok, a short video shooting and editing app unveiled by a spokesperson.

For weeks the discussions and debates about Tiktok’s future in the US continued as President Trump demanded selling of the app to a US-based firm or shutting it down from the nation. 

With the latest updates, there are not many revelations about the agreements between TikTok and Oracle, and this is only specified as a complete sell. Previously before Oracle’s news, Microsoft announced that it wouldn’t buy and take over the operations of TikTok from ByteDance.

Bytedance also submitted some proposals to the Treasury Department of the US, and Oracle confirms being a part of it. Later, it was also disclosed that the proposal serves as a “trusted technology provider.”

TikTok: A Controversial app!

TikTok is the first-ever Chinese platform in the social media sector with grand popularity in the US and other Western nations. It also is the first ever to seek such a massive fan base in the different regions apart from its home-land. Additionally, Sensor Tower disclosed that within the first three months, TikTok got around 315 million downloads. That is the largest number in quarterly downloads in the global history of the apps.

However, Mr. Trump and the other US politicians considered it a threat to the nation’s security as Beijing might use the same as a tool for spying. Some other higher officials also raised concerns that it might get used for collecting the citizens’ personal information and details, or the Chinese government might also inspect the contents considered sensitive by them.

TikTok, on the other hand, denied all the allegations and mentioned that it has the data centers entirely out of China and located out of it too. They also added that none of any data is subject to the laws of China.

The revelation of the deal between Oracle and TikTok came out a day before the ban was scheduled over TikTok in the US. Also, after 20th September 2020, the Commerce Department will clarify the types of dealings and business involved and what types of deals having TikTok is will the nation prohibit. This was with effect on the signing of an executive order by Donald Trump on 6th August 2020.

Moreover, there are no clarifications that whether or not the deal between TikTok and Oracle will allow the working of the app in the nation and avert the ban. The order’s scope in yet uncertain and Mr. Trump’s remarks in the matters about TikTok increased the confusion about the implementation of the ban. Trump also mentioned in some other order that TikTok could find a buyer till 12th November 2020.

The looming ban also got challenged by an employee of TikTok in the federal court, and he seeks some judicial decisions to suspend the executive order of 6th August 2020. For the same, a hearing for the plea got scheduled for Tuesday. Additionally, TikTok also sued Mr. Trump’s administration on order and considered it “heavily politicized.

Deal’s Structuring:

More details about Tiktok and Oracle’s agreement are not yet unveiled, but the experts pointed towards other deals and partnerships between other foreign companies and the US ones.

When SoftBank, a Japanese union, acquired a stake of 78% in the 2013’s Sprint, they agreed on certain conditions for addressing the nation’s security-based concerns. Furthermore, Sprint’s board appointed a newer member intending to oversee national security matters for better provisions smoothly. The justice departments, the US defense, and the Homeland security all got exclusive powers to review the deals for some equipment.

Similarly, Center for Strategic and International Studies’ senior Vice president James Lewis mentioned that ByteDance and Oracle would also focus on “Oversight, transparency and how they structure it for Americans involved and the information they have on Americans.” He is also an advisor on the Sprint deal of SoftBank. 

James lewis also added that they might generate a mediatory entity for examining the relationship between TikTok and ByteDance. With the agreement, they might also implement certain limitations for what information ByteDance can access and what it cannot. It might even add some approved American officials on the board of the company.

Harry Broadman, the Berkeley Research Group’s partner, and Foreign Investment Committee’s former member considered that even after reaching the consensus, the partnership between TikTok and Oracle would turn out to be overly complicated.

New rules of China complicating TikTok’s sale:

Amid the growing tension between China and the US, the US government went after certain Chinese firms and targeted them like TikTok, Huawei, and WeChat. Trump accused these apps of hindering the security of the nation and exploiting the privacy of the citizens.

Harry Broadman specified that “We’re in a different territory where national security issues, particularly with personal information, have risen to the fore.

On Monday, China’s media reported that ByteDance would sell no operations of TikTok to any US firm, be it Microsoft or Oracle. A broadcaster of the state also added that they would also not share any source code with any of the US buyers, as revealed by some anonymous sources.

Additionally, Beijing’s percentage contribution in the talks is yet not disclosed, and recently in August 2020, the country also changed specific rules governing the sales of technologies to international buyers. However, the released notices do not disclose the names of the companies. Still, the experts pointed out the changed rule might need ByteDance to seek permission from the Chinese government before selling TikTok to any foreign firm.

The ministry of Foreign Affairs of China denied commenting on the partnership between Oracle and TikTok before Monday, whenever reporters asked about the same. Instead of that, the foreign ministry always criticized the campaigns led by the US Government against TikTok.

Wan Wenbin, a spokesperson from China, also vocalized that “Without any evidence and under the pretext of national security, they abuse state power and conduct unreasonable suppression and intimidation of non-US companies that have achieved a leading edge in a certain field. We will firmly support relevant companies to safeguard their own legitimate rights and interests.”

Microsoft’s loss:

The victory of Oracle in acquiring the deal for the acquisition of US Operations of TikTok led to Microsoft’s failure. Microsoft looked for seeking TikTok’s arrangement for weeks, and several analysts also unveiled that it was a “coup,” and that too a potential one. They also revealed that TikTok is the fastest growing platform in the social media industry. Microsoft lost the opportunity to expand its reach with the help of TikTok and get better revenues and customer acquisition.

Also, Microsoft stated in one of their blogs that “We are confident our proposal would have been good for TikTok’s users while protecting national security interests. To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement.”

Additionally, Walmart also participated in the negotiations with Microsoft for some potential and critical deals. The retailers exhibited their interest in how TikTok might support them for better customer acquisition. Walmart also specified on Sunday that “It continues to have an interest in a TikTok investment and continues discussions with ByteDance leadership and other interested parties. We know that any approved deal must satisfy all regulatory and national security concerns.

READ  Hong-Kong lawmakers are promoting anti-government protests in 2019, now arrested

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