Five critical questions about the TikTok-Oracle deal

Five critical questions about the TikTok-Oracle deal
Image: Reuters/Dado Ruvic/Illustration
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Oracle has reportedly beaten Microsoft in the race to buy TikTok’s US operations before the Trump administration makes good on its threat to ban the ultra-popular video sharing app. On Sept. 13, the Wall Street Journal reported that the corporate software behemoth had reached a deal with the app’s parent company, ByteDance.

But the dust is far from settled: The companies have made little information about the deal public, and it’s unclear whether the terms they’ve negotiated can satisfy competing regulators in Washington and Beijing. Many of the most basic questions about TikTok’s fate remain unanswered.

Did Oracle buy TikTok?

Probably not. The Wall Street Journal reported that Oracle would become TikTok’s “trusted tech partner” in the US, shortly after Microsoft acknowledged that it had lost its bid to buy the app. But US outlets and Chinese state media say the partnership will stop short of an outright sale.

“Trusted tech partner” is not a technical term in the world of mergers and acquisitions; instead, it appears tailor-made to address the Trump administration’s instinctive distrust of China, rooted in real concerns about Beijing’s creeping surveillance, which sparked the scramble to sell TikTok.

How will the TikTok-Oracle partnership work?

No one knows. Chinese state media emphatically reported that ByteDance will not turn its coveted recommendation algorithms over to any US buyer, in accordance with Beijing’s new restrictions on technology exports. (The algorithms are thought to be the company’s most valuable asset.) Instead, CNN reported that ByteDance could create an American intermediary to govern US operations, giving Oracle a stake.

Whatever structure the companies wind up with, the Wall Street Journal reported that some existing US TikTok investors, including Sequoia Capital and General Atlantic, will also wind up with a stake. The paper also reported that Walmart, which previously tried to piggyback on Microsoft’s TikTok bid, is now angling to get involved in the Oracle deal.

Will Trump approve the TikTok-Oracle deal?

He might not. The deal appears to fall short of his demand for a full sale—but the mercurial US president is known to change his mind and may decide to accept it and claim victory in the run-up to the November elections. Oracle chairman Larry Ellison has raised money for Donald Trump’s reelection campaign, and Trump has said he would favor a TikTok-Oracle deal.

Treasury Secretary Steven Mnuchin and the Committee on Foreign Investments in the US are reviewing the terms of the agreement to make a recommendation the week of Sept. 14.

Will TikTok change if the sale goes through?

Under Oracle’s watch, it’s unlikely. In a pointed statement, Microsoft said it “would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting misinformation”—acknowledging the serious shifts that would be required to appease US regulators.

But ByteDance rejected Microsoft’s offer on Sept. 13. Instead, Oracle, a company with almost no experience selling consumer-facing technology, will take on a role hosting a version of TikTok unlikely to be very different from the version users see outside the US, if the deal is approved.

When will we find out whether TikTok gets banned in the US?

Whenever Donald Trump feels like it. The president first set a Sept. 15 deadline for TikTok to be sold to a “very American” company, then issued an Aug. 6 executive order suggesting that the deadline would actually be Sept. 20, then issued another order which set the deadline at Nov. 12. He could change his mind again.

It remains unclear how exactly the president could ban the app, given that he doesn’t have the power to order internet providers to block TikTok’s web traffic (as Indian authorities did in June). Instead, the executive branch could rewrite existing rules in such a way that they would cajole Apple and Google into removing TikTok from their app stores. TikTok has already filed a lawsuit challenging the president’s authority to limit Americans’ access to the app.