Finally, the agreement between TikTok and Oracle is still valid

While the deal is on hold indefinitely, the deal between TikTok and Oracle could very well finally go ahead. Thus, the data of US TikTok users will be hosted by the US company.

Washington suspects TikTok of leaking information to Beijing

The ByteDance subsidiary is indeed wary of US regulators and seeks to appease them by signing an agreement with a US-based company. As explained edgethis solution is called Project Texas inside a Chinese company due to the fact that Oracle is headquartered in Houston, the largest US state.

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The tumultuous relationship between TikTok and the US is not new. In the summer of 2020, President Donald Trump announced that he wanted to ban the app on American soil due to the perceived proximity between its parent company and the Chinese government. Authorities feared that the personal data of American TikTok users could be taken to Beijing. For Trump, the condition for the continued operation of the social network in the United States was the acquisition of its American activities by an American company.

Microsoft was initially approached to take care of this, but Oracle was eventually chosen. However, the Chinese firm has repeatedly appealed the US decision, postponing the deal until a judge prevented the Trump administration from implementing its idea under the International Emergency Economic Powers Act (IEEPA) in December 2020.

Once in power, Joe Biden put an end to his predecessor’s latest proceedings to ban TikTok from American soil.

American flags in front of the official building.

Since 2020, US authorities have been wary of TikTok. Photograph: Caleb Fisher/Unsplash

Deal with Oracle to ease tensions

Today, the trade war between the US and China is still on the rise, and finally the Democratic president appears to be following in Trump’s footsteps regarding his anti-China policies. The Committee on Foreign Investment, the US administration’s multi-agency body in charge of reviewing corporate acquisitions that has been a source of concern about TikTok in 2020, hasn’t really changed its mind and is even repeating itself.

This time, ByteDance intends to respond well to prevent the situation from escalating; so he wants to make an agreement with Oracle. According to Reuters, the deal is nearing completion and will allow the cloud provider to store US user data on its own servers. In addition, an American data management team of hundreds will also be responsible for isolating American information from ByteDance. The two companies are currently discussing a structure where this team will operate autonomously and not be under the control or oversight of TikTok.

However, it is not yet known whether the Foreign Investment Committee will accept this agreement and whether it will comply with IEEPA.

Why is ByteDance playing this game?

The US market is very attractive to TikTok, which may explain why ByteDance is heading towards Washington this time around. In 2020, a survey showed that American teens prefer the Chinese app Instagram over a US-made social network.

TikTok is now one of the most popular social networks in the world, and last August it became the most downloaded app. For its part, ByteDance is one of the fastest growing companies in the world, with a valuation ranging from $325 billion to $450 billion. If she wants to continue on her way, it’s best not to make too many waves…

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