TikTok & Oracle’s cooperation violates Trump’s executive order

TikTok US China Microsoft

Yesterday, Republican Senator, Josh Hawley, a close ally of Trump, issued a letter calling on CFIUS (Committee on Foreign Investment in the United States) to reject the cooperation between Oracle and TikTok. The reason is that “ByteDance has no intention to give up control, and TikTok will continue to be subject to Chinese laws, putting Americans’ data at risk” and “the proposal violates the president’s executive order.”

Last Thursday, following U.S. President Trump’s denial of extending the deadline for TikTok to sell its U.S. business, Josie Hawley claimed that he did not support the extension of the deadline for TikTok’s sale and demanded that TikTok’s U.S. business be sold.

This is inconsistent with the statement of the US Treasury Secretary. On September 14, U.S. Treasury Secretary, Steven Terner Mnuchin said in an interview that the deadline for TikTok’s final solution is September 20. The Treasury Department has received a proposal over the weekend that Oracle will serve as TikTok’s trusted data security agent. It will be a regulatory partner, representing the resolution of US national security issues. If the plan is successful, Oracle will provide TikTok with cloud services, similar to Apple’s data compliance plan in China from Guizhou. However, it does not involve an outright sale of TikTok. Furthermore, it does not also transfer of TikTok’s core technology.

TikTok: This the Company's Official Statement Following the Ban

Technically, this is a far cry from what the U.S. president wants. Their (TikTok and Oracle) agreement is still subject to U.S. approval. However, it is most likely that they will not get it. Nevertheless, both TikTok and Oracle are optimistic that they can convince the American government. 

Microsoft is out of the picture

Microsoft is completely out of the picture now and it already has an official statement. The Chinese government updated the technology export control list two weeks ago. The new export control restricts the export of technologies such as TikTok algorithms. Bytedance subsequently stated that it would strictly abide by Chinese regulations. According to a Chinese government official, “ByteDance can sell all TikTok products, but not its algorithm”. Actually, TikTok without its algorithm is technically useless.

A source familiar with the technology said that ByteDance uses the same source code for TikTok in all countries/regions and has been modified for different markets. The source said: “Theoretically, the US team can copy the algorithm, but it takes time to get users to do the same…”

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