Oracle has reportedly won the bid to buy social video platform TikTok from Beijing-based parent company ByteDance, reports NBC News. Oracle beat out other bidders, including Microsoft and Walmart who partnered to put together an acquisition proposal. The Trump administration pressured ByteDance to sell TikTok’s U.S. operations due to national security concerns. President Trump set a deadline of September 15 for an agreement to be reached to avoid a potential ban of social video platform TikTok in the United States. The agreement must be approved by the Trump administration before it can go forward.
“ByteDance let us know today 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 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,” said Microsoft.
Not a done deal
The sale is not a done deal, however. There are potential hurdles, including getting approval from the U.S. Committee on Foreign Investment in the United States, also known as CFIUS. Also, economic and political tensions between the United States and China could potentially interfere. The Chinese government has recently changed their rules to that would give the country the right to veto potential deals that involved the sale of specific types of technology to foreign owners, says CNN.
According to TechCrunch, the posturing continues. TechCrunch reports that China’s state broadcaster CGTN said ByteDance will not sell the U.S. operations of its social video platform to either Microsoft or Oracle. ByteDance has not officially commented on whether an agreement has been reached or not.
REGISTER NOW FOR SUBSCRIPTION BOOT CAMPS
Understand the unique core issues, strategies, and tactics
Meanwhile, TikTok has filed a lawsuit against the U.S. government, alleging it was denied due process. The company also stated that the allegations against security concerns are invalid and the federal government failed to act in good faith. With more than 100 million American users, and 1,500 U.S. employees, TikTok said Trump’s August 6 executive order was an “extreme action.”
“Now is the time for us to act. We do not take suing the government lightly, however we feel we have no choice but to take action to protect our rights, and the rights of our community and employees,” said TikTok. “In our complaint we make clear that we believe the Administration ignored our extensive efforts to address its concerns, which we conducted fully and in good faith even as we disagreed with the concerns themselves.”
Also, TikTok has a new CEO. In August, Kevin Mayer announced his resignation as chief executive officer of TikTok and chief operating officer of ByteDance. With the company for less than four months, Mayer said he was leaving his roles due to the unforeseen political tensions between China and the U.S. Vanessa Pappas, general manager for TikTok, has been named the interim head.
Over the last several months, rumors have run rampant on what will or won’t happen to ByteDance-owned TikTok and if or how the Chinese and U.S. governments will be involved. Though reports indicate that Oracle is the winning bidder, neither ByteDance nor Oracle have confirmed an agreement or disclosed details of the deal of the social video platform. Also, TikTok’s lawsuit remains pending which could have an impact on any potential agreement. Bottom line: This is a very complex situation with huge ramifications for the U.S., China and millions of TikTok users around the world. We’ll continue to follow the story and will provide regular updates as we learn more.