If the rumours are true, then TikTok could be heading to the Oracle. This could make a big impact on the social media company and the way that people communicate. However, there are some things that should be kept in mind before making any assumptions. These are listed below.
Microsoft isn’t buying TikTok
TikTok, the popular social video app created in China, is in a bit of a bind. The company is under pressure to sell its U.S. operations to a foreign buyer and could be banned in the country, according to President Trump. It also has been sued over its lack of due process.
A deal to buy TikTok would have provided Microsoft with a major foray into the social media space. However, there have been multiple complications, such as the possibility that the acquisition would raise new scrutiny on Microsoft itself.
Earlier this month, the Financial Times reported that Microsoft was in preliminary talks with a potential buyer for TikTok. This was preceded by a Microsoft official saying it was in talks to purchase TikTok’s operations in Australia, Canada and New Zealand.
But while the deal is still in the works, it’s unclear whether or not it will occur. If it does, the deal will need the approving touch of US officials, such as the Treasury Department.
One reason for the lukewarm response from Microsoft is that TikTok is considered to be a security threat. There are fears that the Chinese government might be able to access user data. In addition, TikTok is owned by ByteDance, a Chinese tech giant that’s worth about $100 billion.
But TikTok has a lot of momentum. It’s a free title in the Google Play Store and has a huge user base. Users can upload videos of dance moves, cooking tips and movie reenactments. Many of them clock in at less than a minute.
The app’s popularity has also drawn criticism from White House trade adviser Peter Navarro. He’s suggested that Microsoft may be helping the Chinese government spy on American citizens.
Other Big Tech firms, including Facebook and Amazon, are also facing antitrust scrutiny. Even Google, which is not directly controlled by the Chinese government, is seen as a competitor and has been under scrutiny as well.
TikTok, meanwhile, is a popular, engaging, and high-engagement social app with an active user base, particularly the younger set. Yet, the company’s owner, ByteDance, is valued at a whopping $100 billion, meaning its valuation would drop by 50% if the app was shut down in the United States.
National security threat allegations
TikTok is a video sharing app with a huge user base. The US government is concerned about how it is gathering data, and how it might be used to spread misinformation. It has been under investigation by the Committee on Foreign Investment in the United States, or CFIUS, for several years.
Last year, TikTok was in negotiations with Walmart and Oracle. The Trump administration halted the deal. However, the app continues to be under scrutiny. This is a threat to national security, experts argue.
In January, a team of security researchers announced that TikTok had several vulnerabilities. These could allow hackers to control accounts, change privacy settings, and upload videos without permission. They cited unpatched vulnerabilities as one of the reasons for their findings.
The FBI Director has warned lawmakers on Capitol Hill that the app poses a national security threat. He stated that the app’s data would allow China to target individual users, and that the app might be used to censor political speech.
TikTok’s parent company is Chinese. While ByteDance says the app’s algorithms are not manipulated by the Chinese government, the company did acknowledge that its staff in China had accessed US user data.
Since then, the US Treasury Department has become wary about TikTok. Specifically, the committee has been investigating whether TikTok is collecting American data. If it is, the app will have to get approval from the Committee on Foreign Investment in the United States (CFIUS).
As a result of the CFIUS review, TikTok is currently negotiating a contract with Oracle, the software provider. TikTok plans to store users’ private information on servers in the U.S., while maintaining that it will not share that information with the Chinese government.
TikTok’s CEO has spoken with the Senate. The Senate is expected to hold hearings in October 2021. The hearings will focus on the company’s response to the concerns.
One of the most important questions to ask is where users’ private information will be stored. According to TikTok, it will be stored in a Virginia data center. Despite the company’s claims that US users’ data is not being stored in China, Buzzfeed News reported that TikTok employees in China had access to user data.
ByteDance is now working on what TikTok’s US operations might look like without a deal with Oracle
ByteDance, the Chinese company that owns TikTok, has a plan to make US operations a separate entity, a move that could alleviate some national security concerns. But the proposal does not address the fact that Chinese employees of ByteDance could access US user data.
The deal, dubbed Project Texas, would house all of TikTok’s user data for the U.S. in a Virginia data center. It would also allow a dedicated team of engineers and cyber security personnel to act as a gatekeeper for users’ information. However, this team would be under the supervision of TikTok, rather than being completely under its control.
As part of the deal, TikTok has agreed to create a US-based subsidiary and will not transfer the company’s algorithms or technologies to Oracle. Instead, Oracle will host cloud storage for the U.S. and review the app’s source code.
The agreement is a nod to Oracle’s headquarters in Austin, Texas. In addition, it may allow the social media app to get its hands on the consumer data it needs to boost its advertising power. But some critics wonder whether it will do the job.
There are fears that the Chinese government might use the platform to spy on US citizens. That’s why the Trump administration has been pressuring the company to sell out, but ByteDance has been resistant.
While the deal has been approved by President Trump, it may be in limbo after the 2020 election. If TikTok isn’t able to secure approval from the Chinese government, the app may cease to function in the United States.
One possible solution to the problem is for ByteDance to transfer the algorithm and technologies to an outside firm. But it’s unclear what kind of protections the government will have. And that’s a concern for both the White House and Congress.
In the meantime, TikTok has stepped up efforts to safeguard its users’ data. For example, it’s hired a team of “United States Technical Services” workers to help ensure it stays in compliance with US laws and regulations.
Lastly, TikTok and Oracle are still discussing how to safeguard the data of the company’s American users. The video sharing platform and the technology giant are expected to finalize their deal this week.
ByteDance’s position on Chinese security
ByteDance’s position on Chinese security has been scrutinized in recent months. Several reports have emerged that sensitive TikTok data has been accessed from within China. However, TikTok claims that its data centers are not located in China.
The company has stated that its employees are required to have authorization before they can access users’ personal information. Furthermore, it says that all of its user data is stored in the United States. In addition, TikTok has vowed to store user data in a Virginia data center.
While TikTok has stated that its data centers are not in China, there are still concerns that the Chinese government will access the data. Moreover, the US has concerns about the Chinese Communist Party’s ability to use TikTok to spy on American citizens.
A number of lawmakers have expressed concern that ByteDance has used H-1B guest worker visas. These workers have the potential to have ties to the Chinese Communist Party. This is a serious concern because the party is known to use these workers for surveillance.
However, the Treasury Department has not responded to our request for comment. We also do not know whether TikTok is using these H-1B guest worker visas in a similar manner. Nevertheless, we believe that TikTok’s use of these visas is suspicious.
TikTok’s parent company is ByteDance, a Chinese company. It has a number of investors from around the world. One of those investors is General Atlantic.
Previously, TikTok was under the leadership of former YouTube executive Vanessa Pappas. After she left, ByteDance appointed Shouzi Chew, a Singaporean, as its new CEO. Currently, ByteDance is in talks with Microsoft to sell TikTok.
The Senate Intelligence Committee has launched an investigation into TikTok’s misrepresentations. During the committee’s hearing, TikTok’s Chief Operating Officer Vanessa Pappas defended the company’s position on Chinese security. She said that the company was in talks with the CFIUS to ensure that its contract would protect American national security.
Meanwhile, a recent Forbes report suggests that ByteDance is monitoring American citizens. Although the report is not stating exactly what is being monitored, it does mention that a Beijing-based team of employees was assigned a monitoring project.
