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Home / Business / Oracle’s TikTok bid does not solve some security issues in the U.S.

Oracle’s TikTok bid does not solve some security issues in the U.S.



TikTok Social Great Lede

Photographer: Hollie Adams/Bloomberg

People familiar with the matter said that Oracle Corp.’s bid for TikTok failed to address Trump administration officials’ concerns that China-owned video-sharing applications pose a threat to US national security.

President Donald Trump has the right to sign the agreement, but continued concerns from national security officials may influence his decision. People familiar with the matter said that the agreement is still at the negotiating table, and discussions between administrative officials and the company continue. They declined to be named because the negotiations are confidential.

People familiar with the matter said that addressing these remaining issues could pave the way for US approval. People familiar with the matter said that the two companies are still trying to intercede with the government and believe they can still win.

At a news conference on Wednesday night, Trump stated that he was not satisfied with what he had heard about the bid, but added that he would be informed in detail on Thursday morning. He said: “I am not going to sign any agreement.”

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He now has four days to set his own deadline (September 20) to decide whether to approve TikTok’s Chinese parents’ proposal ByteDance Ltd. will reorganize the global business of video applications to make it a new independent company, which will give Oracle and other US investors a minority stake.

Officials, including Secretary of State Michael Pompeo (Michael Pompeo) worry that after a potential deal, People familiar with the matter said that ByteDance Ltd. can still access user data from its nearly 100 million users in the United States. Officials remain vigilant about the proposed new ownership structure and the company that will have much impact on China.

According to people familiar with the matter, under the terms of the proposed transaction, Oracle will have full access to TikTok’s source code and updates to ensure that the company’s Chinese parent company does not have a back door to access the 100 million American users of the video sharing app. data. Describe the regulations submitted to the US government over the weekend.

of People familiar with the matter said these terms clarify what companies and security officials mean when they refer to Oracle as a “trusted technology partner,” rather than just storing data on Oracle’s US cloud servers. They did not want to be named. No right to speak publicly.

Oracle will be able to check all source code from algorithms that can determine which videos to show to which users to ensure that there are no backdoors, and will be able to continue to review the technology when updates occur to ensure that there are no new issues.

The newly established TikTok will be headquartered in the United States and will hire an independent board of directors approved by the US government. People familiar with the matter said the independent company will also be subject to supervision by a third party who will report to the US government and provide continuous audits, reports and agreements to deal with any incidents that may occur.

Some people familiar with the matter said Treasury Secretary Steven Mnuchin (Steven Mnuchin) has reviewed the proposed transaction. Justice Department officials said that Attorney General William Barr (William Barr) only learned of the deal on Wednesday and is reviewing the deal. He declined to comment further. Two people familiar with the matter said that Barr spoke with Oracle executives on Wednesday morning. Pompeo spoke with company officials last week.

Before the election on November 3, TikTok had become Trump’s highest target for suppressing China. The president fell behind Democratic opponent Joe Biden in the polls and tried to use his tough stance against Beijing as a selling point for voters.

The Treasury, State and Justice Departments are all part of the Committee on Foreign Investment in the United States (Cfius), which is responsible for reviewing the impact of transactions on national security. People familiar with the matter said that at a meeting on Tuesday afternoon, officials were concerned that the deal would give a majority stake in TikTok’s US assets to ByteDance, with Oracle holding a minority stake.

A person familiar with the matter said that the group is expected to meet again on Wednesday to discuss a potential sale.

White House Press Secretary Kayleigh McEnany (Kayleigh McEnany) said that in a briefing with reporters, TikTok’s decision was a “short-term order.”

“We are very concerned about protecting the data and security of American citizens.”

Spokespersons for the Ministry of Finance and the state declined to comment. Officials from the Justice Department did not immediately answer questions about whether the Attorney General had already spoken to Oracle.

TikTok declined to comment.

Although user data from Americans will be stored by Oracle in the United States, the rest of the application’s technology seems to still exist, including ownership of an excellent algorithm, which videos the algorithm can choose and show users, and the Chinese engineering team. Will remain in the hands of the Chinese owner of TikTok.

Regardless of where the data is stored, critics of the transaction say that as long as Tiacock’s Chinese parent company exercises financial control over the company, national security issues cannot be resolved.

The Oracle agreement is facing a sharp decline in Congress, and some congressmen believe that Oracle’s terms are far from sufficient to address Trump’s initial request for a sale. Florida Senator Marco Rubio and five other Republicans wrote to Trump on Wednesday that the transaction in the form of the current report “leaves a major national security issue that has not been resolved.”

Senator Ted Cruz of Texas also stated in another letter to Mnuchin that the deal is far from complete. Like other opponents, Cruz called for the “complete sale” of Ticock when necessary. Some people also asked TikTok to hand over algorithms that help determine what users see.

Such opposition from the senators is important because many of them are in direct contact with Trump and will almost certainly rely on him to reject any deal they do not like. The refusal of Congress may also present the prospect of reputational risk to Oracle, because lawmakers may be ashamed of humiliating the company for a deal that they believe undermines US national security.

The proposal submitted to Cfius is in stark contrast to the original requirements made by President Trump in a pair of executive orders banning the app issued last month, unless the app is sold to US owners.

The new TikTok deal with Oracle does not require software companies to directly purchase business. Instead, Bytedance will retain a majority stake and provide business shares for Oracle and serve as a key technology partner.


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