President Donald Trump has approved the recent partnership between Oracle and TikTok “in concept.” In giving his “blessing.” President Trump signals that the deal might soon be officially approved by other federal agencies conducting reviews, resulting in a resolution of the prolonged TikTok conflict. Trump and the executive branch of the U.S. government have identified TikTok as one of multiple Chinese companies that posed a threat to U.S. national security interests. Concerns regarding surveillance and data collection were chief among the justifications for the administrations threats to ban the service within the U.S. However, the recent deal was designed to eliminate these concerns.
There has been speculation that opposition to the deal might result in the U.S. eventually implementing a complete ban against the social media service, building upon the partial download ban that is set to take place tomorrow. However, Trump’s recent comments indicate that observers ought to expect a full approval of the deal in the coming days as Cfius, Treasury, and other agencies complete their assessments of the proposed deal, which is also slated to create “at least” 25,000 American jobs.
Bloomberg reports that Trump actually appears to have achieved some sort of literal financial concession, the most unprecedented of his demands being met. TikTok is reported to be making a five billion dollar donation to an education fund. Meanwhile, the major source of remaining uncertainty is whether China will accept the deal as well. Earlier comments from within the Chinese government indicated that a deal that resulted in a loss of ownership or in the U.S. company acquiring certain proprietary technologies from within TikTok would not be acceptable; the deal overcomes these hurdles, but China has yet to officially indicate its approval.
As TikTok’s ‘Trusted Technology Partner,’ Oracle claims that it will prevent data generated by U.S. users from being transferred to ByteDance, TikTok’s parent company, as all such data had previously been directed. Thus, there should be relative certainty that the data is not reaching Chinese authorities. If this is all true, and the relevant federal agencies determine it to be so, then the impending download ban as well as future actions should come to a halt as TikTok returns to business as usual.
Trump appears to have secured multiple of his political and economic goals within the TikTok affair and, unless any new information that we are not already privy to is released, there will be no ban. That said, the deal could face challenges from the Chinese government that might bring parties that were previously antagonistic together. That shouldn’t be expect though as ByteDance, and therefore TikTok, faces significant pressure from within China, its home as well as a significant global market for social media and beyond.
Source: Bloomberg
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