Amid reports that Oracle has won the battle with Microsoft to acquire ByteDance’s U.S. operations for TikTok, new information has come to light regarding Tiktok and Oracle’s deal. Instead of a complete acquisition, it seems that ByteDance has chosen Oracle as its US partner for its popular TikTok video service, a decision that comes as a deadline for a ban of the popular video-clip sharing app draws near.
After India banned the popular TikTok app in the country over political differences with China, the app caught the attention of the American President, Donald Trump who deemed it a national security threat. Under the pretense of saving American users’ data from being abused by the Chinese government, President Trump passed two executive orders to ban the TikTok app and all transactions via WeChat and ByteDance in the United States by November 12, 2020.
ByteDance partners up with Oracle
The report by Reuter states that:
“ByteDance will not sell TikTok’s U.S. operations to Oracle Corp ORCL.N or Microsoft Corp MSFT.O and will not give the source code for the video platform to any U.S. buyers, China’s state-run English television channel CGTN reported on Monday, citing sources.
People familiar with the matter told Reuters that ByteDance abandoned the sale of TikTok in the United States and decided to pursue a partnership with Oracle in hopes of avoiding a U.S. ban while appeasing the Chinese government.”
The development follows a report from The Wall Street Journal on Sunday evening that claimed software giant Oracle had closed the deal moments after Microsoft announced it had been rejected. The deal reportedly stopped short of an outright acquisition of all assets and intellectual property, with TikTok considering Oracle as a “trusted tech partner” instead.
Recently, it was reported that the Chinese government sees the acquisition of the app by an American company as a sign of weakness and that China would prevent the sale by imposing import laws.
Microsoft was originally considered as the frontrunner in acquisition talks with TikTok’s parent company, ByteDance, and provided a formal proposal that would have involved the purchase of TikTok’s operations in the United States, Canada, Australia, and New Zealand.
In a blog post following the news, Microsoft wrote:
“ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft. 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. We look forward to seeing how the service evolves in these important areas.”
Any deal would still need to be reviewed by the Committee on Foreign Investment in the United States (CFIUS), a U.S. government group chaired by the Treasury Secretary that studies corporate mergers for national security reasons.
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