[ad_1]
NEW YORK: ByteDance dropped the sale of TikTok in the United States on Sunday (September 13) in pursuit of a partnership with Oracle that hopes to avoid a US ban while appeasing the Chinese government, people familiar with the matter told Reuters.
The Beijing-based company had been in talks to sell the US TikTok business to Oracle or a Microsoft-led consortium after US President Donald Trump ordered the sale last month and threatened to shut down the popular app. of short videos in the United States.
While TikTok is best known for its nondescript videos of people dancing going viral among teenagers, US officials have raised concerns that information about users may be passed on to the communist government of China.
READ: Microsoft says its offer to buy TikTok was rejected
The sale negotiations were disrupted by China’s update of its export control rules late last month that gave it a voice over the transfer of the TikTok algorithm to a foreign buyer. Reuters reported last week that the Chinese government would rather shut down TikTok in the United States than let it be part of a forced sale.
Under the proposed deal, Oracle will be ByteDance’s technology partner and take over management of TikTok user data in the US, the sources said. Oracle is also negotiating a stake in the US assets of TikTok, the sources added.
It’s unclear whether Trump, who wants a US tech company to own the majority of TikTok in the United States, will approve the proposed deal. The Committee on Foreign Investment in the United States (CFIUS), which reviews deals for potential national security risks, oversees the talks between ByteDance and Oracle.
READ: China would rather see TikTok US shutdown than forced sale
READ: Trump says there will be no extension of the TikTok deadline
ByteDance plans to argue that CFIUS ‘approval two years ago of China Oceanwide Holdings Group’s purchase of US insurer Genworth Financial provides precedent for the structure of the deal it proposes with Oracle, the sources said.
In that agreement, China Oceanwide agreed to use a third-party US-based service provider to manage Genworth’s US policyholder data. ByteDance will argue that a similar arrangement can safeguard the data of US TikTok users, the sources said.
ByteDance and Oracle did not immediately respond to requests for comment. The White House declined to comment.
Oracle Chairman Larry Ellison is one of the few Trump supporters in the tech world.
Microsoft said earlier on Sunday that ByteDance informed it that it would not be selling TikTok’s operations in the United States.
READ: TikTok Owner Will Invest Billions, Recruit Hundreds In Singapore Over 3 Years: Source
TikTok has been at the center of a diplomatic storm between Washington and Beijing, with President Donald Trump giving Americans a deadline to stop doing business with ByteDance, effectively forcing an American company to sell TikTok.
Trump claims that China could use TikTok to track the location of federal employees, create files on individuals to blackmail and conduct corporate espionage.
TikTok has filed a lawsuit challenging the US government’s crackdown, claiming that Trump’s order was a misuse of the International Emergency Economic Powers Act because the platform is not “an unusual and extraordinary threat.”
Downloaded 175 million times in the US, TikTok is used by 1 billion people around the world to make wacky, short-form videos on their mobile phones. It has repeatedly denied sharing data with Beijing.
