(FiveNation.com)- Oracle and not Microsoft will become TikTok’s U.S. technology partner, if the U.S. government approves the transaction.
Since President Donald Trump announced he would ban the social media app if it didn’t sell its U.S. interests to an American company, Microsoft has been the company favored to complete the purchase. But officials from the company said the app’s parent company, ByteDance, rejected their offer.
According to sources for the New York Times, it’s not clear what being a “technology partner” would mean exactly for Oracle and TikTok. It’s unclear whether that would mean Oracle would own a majority stake or take over the company’s U.S. interests altogether.
The structure of the deal is certain to play a role in whether the Trump administration approves of it and allows the app to continue operating in the U.S. The president has serious security concerns about ByteDance, which is based in China. He and his top advisors will have to be convinced that this deal with Oracle will protect American interests.
While ByteDance and Oracle both didn’t comment to the Times, Microsoft released a statement that said:
“ByteDance let us know today that they would not be selling TikTok’s U.S. operations to Microsoft. We are confident our proposal would have been good for TikTok’s users, while protecting national security issues.”
Trump said a deal had to be agreed upon by September 20. If no deal is in place, the president threatened to ban the app in the U.S.
Just because a deal is apparently in place with Oracle, though, doesn’t mean it’s going to go through. In addition to the scrutiny it will receive from the Trump administration, China recently issued new regulations that essentially bar ByteDance from transferring TikTok data to any foreign buyer unless they get permission from the government.
These new regulations are apparently what did in Microsoft’s bid. Officials from the company said the only way to protect American users’ privacy was to take over the computer code of the app. It also said it was essential to take over the algorithms that decide which videos are shown to users. In all 100 million Americans use TikTok every month.
As Microsoft’s statement said:
“We would have made significant changes to ensure the service met the highest standards for security, privacy, online safety and combating disinformation.”
No details of Oracle’s plan have been released as of yet. The technology that TikTok uses is written by an engineering team based in Beijing. Mike Pompeo, the U.S. Secretary of State, has said this team answers to various intelligence agencies in China.
Naturally, this is a major concern to the National Security Agency and the United States Cyber Command. Both agencies have said whoever controls TikTok’s computer code could either censor or feed videos that contain “politically-sensitive information” to users.
To this point, ByteDance has denied that they are working hand-in-hand to help the Chinese government. But that hasn’t stopped Trump and his administration from being leery of the company’s operations.