Donald Trump says he approves Oracle’s deal with TikTok in principle

  • AseanPlus News
  • Sunday, 20 Sep 2020

US President Donald Trump said on Saturday he has approved the Oracle Corporation’s proposed deal with TikTok for the Chinese video-sharing app to continue to operate in the US, after threatening to ban the app from the country in August.

Trump told reporters at the White House that he has “given the deal my blessing” as he left for a campaign rally in Fayetteville, North Carolina: “I approved the deal in concept,”

“It'll be totally controlled by Oracle and Walmart. All of the control is Walmart and Oracle, two great American companies,” Trump said. “The security will be 100 per cent.”

TikTok Global will likely be headquartered in Texas and will hire at least 25,000 people, Trump said.

The comment came a day after the Commerce Department announced that new downloads of the app would be banned on Sunday.

On Wednesday, the Committee on Foreign Investment in the US (CFIUS), an inter-agency governmental body reviewing acquisitions by foreign companies, found that having Oracle as TikTok’s “trusted technology partner” in the US was not enough to protect US national security.

Trump said later Wednesday that “if that’s the case, I‘m not going to be happy with that ... I mean, just conceptually I can tell you I don’t like that.”

Following CFIUS’s announcement, the companies continued discussions with administration officials in the hopes of finding a way to address the national security concerns, although it wasn’t immediately clear whether or how much Oracle’s proposed role as a “technology partner” had changed as a result.

Bloomberg News has reported that Oracle would have full access to TikTok’s source code and updates to make sure there are no “back doors” that could allow the transfer of user data to the Chinese government, but ByteDance would continue to own the majority of TikTok’s assets.

When Trump insisted in August that TikTok’s Chinese parent company ByteDance sell the app’s US operations to an American company, he was aiming for a clear-cut deal that would hand him a win over China.

A sign for Oracle is seen outside the company’s headquarters in Redwood City, California. Photo: EPA-EFE

A TikTok-Oracle partnership would still be a success for Trump, who has featured his opposition to the app in his presidential re-election strategy, an example of his administration’s tough stance against China.

Trump said that TikTok needed an American owner to ensure that its users’ personal data – TikTok already has more than 100 million US users – would not be turned over to the Chinese government. Both TikTok and ByteDance have repeatedly denied doing so.

Oracle, which has close ties to the Trump administration, emerged late in negotiations, edging out Microsoft, which had teamed up with the retailer Walmart in a bid that was regarded as the front-runner to buy TikTok.

Microsoft, which had been in talks to acquire TikTok’s US, Canada, Australia and New Zealand assets in a deal valued up to US$30 billion, announced on September 12that ByteDance had rejected its bid.

Negotiations stalled about three weeks ago after Beijing announced new export control rules that restricted sales of technologies – including algorithms and artificial intelligence – to foreign buyers.

As a result, Beijing would have authority to review the sale of TikTok; the app uses AI technology to power an algorithm that tracks its users’ behaviour.

Analysts have said that without that technology, TikTok would become much less valuable.

Microsoft’s chief executive, Satya Nadella, said in a statement that Microsoft’s proposal would have protected national security interests.

Oracle’s co-founder, Larry Ellison, has close ties to Trump, and hosted a fundraiser for him in February.

On Saturday, Trump said there would be a US$5 billion US education fund as part of the deal. “That’s there contribution I’ve been asking for,” Trump said.

Trump could still face backlash for compromising and letting China get a deal that did not address what the US asked for.

In recent days, Trump has come under pressure from US lawmakers to reject the Oracle deal.

In a letter Wednesday to Treasury Secretary Steven Mnuchin, Senator Ted Cruz, Republican of Texas, said, “this planned partnership raises serious national security concerns”.

Another Republican senator, Josh Hawley of Missouri, urged earlier this month that the administration “promptly reject” the proposal, saying it failed to satisfy concerns about China’s influence over the app.

“An ongoing ‘partnership’ that allows for anything other than the full emancipation of the TikTok software from potential Chinese Communist Party control is completely unacceptable,” Hawley said.

A week ago, Trump said “we’ll either close up TikTok in this country for security reasons or it’ll be sold”. - South China Morning Post

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