Wildly popular social media app TikTok is said to have a draft agreement in place with the U.S. government that would allow it to continue operating in the country while retaining Chinese ownership.
The deal was hashed out in recent months, according to a report in the New York Times, and resolves national security concerns that have troubled lawmakers given the platform’s ownership by Beijing-based tech giant, ByteDance. However, the agreement may take months more to finalize, the NYT said, with a top DOJ official and the Treasury both having reservations on whether it’s tough enough on China.
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In 2020, then President Trump issued an unusual executive order blocking the app unless ByteDance sold TikTok’s U.S. business to an American company. Microsoft came in early with an offer. Its bid was rejected in favor of Oracle, which signed on as a technology partner with a group of investors. It was all pretty messy and put on hold but not forgotten. Government officials continue to view the platform as a threat able to siphon users’ data and compromise U.S. security. The NYT says Oracle remains in the picture to help monitor the site.
“We will not comment on the specifics of confidential discussions with the US government, but we are confident that we are on a path to fully satisfy all reasonable US national security concerns,” said a TikTok spokesperson.
The agreement is said to call for all TikTok’s U.S. data to be stored on U.S. servers inaccessible to China. It allows Oracle to monitor the platform’s algorithmic recommendations for Chinese disinformation and propaganda. And it establishes a board of security experts reporting to the U.S. government to oversee TikTok’s U.S. business. ByteDance would retain ownership.
The rapid growth of TikTok, which was run briefly by former top Disney executive and current Candle Media co-CEO Kevin Mayer, has destabilized the entire social media sector, and rivals have called foul. Snap CEO Evan Spiegel said at a conference earlier this month that being owned by privately held ByteDance has enabled TikTok to funnel enormous resources into increasing its footprint. Its growth “wasn’t about innovation, it was about subsidizing large-scale user acquisition around the world,” he said.
Separately Monday, a British watchdog agency said it may fine TikTok £27 million ($28.8 million) for possible breaches of U.K. data protection law in failing to protect children’s privacy on the platform. ICO, the Information Commissioner’s Office, said it issued TikTok Inc. and TikTok Information Technologies UK Limited with a ‘notice of intent’ — a legal document that precedes a potential fine — for breaches between May 2018 and July 2020.
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