Nearly a week after the TikTok ban was lifted in the United States, a potential acquisition by other US investors including Oracle and Microsoft is now being discussed. Chinese company ByteDance, which currently still owns the social media platform, should still be able to keep a small stake in TikTok. Otherwise, ByteDance subsidiary TikTok will become the property of a consortium consisting of Oracle and other US companies, with responsibility for algorithms, collected data and software updates.
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The White House is clearly in charge of the talks, which are being led again this week by the newly appointed 47th US President and Republican Donald Trump. Nonprofit organization NPR was the first media outlet to report about the plans, citing people who are either involved in the talks or working on the negotiation process for the US Congress. Because those affected are not allowed to speak publicly about the process, NPR did not want to reveal their identities.
Oracle, Microsoft and Co. can join
According to the current status of negotiations, Oracle, Microsoft and Co. will take over the majority of TikTok, although the terms of the sale could still change. The first meeting between Oracle and White House representatives took place on Friday, and a second meeting is expected next week, according to NPR. According to NPR sources, Oracle is looking to invest in TikTok with a sum in the double-digit billion range. However, ByteDance is currently seeking a TikTok purchase price of at least $200 billion, which is likely well above the budget of potential investors.
Nothing is known yet about Microsoft’s role, except that the company is involved in the discussions. TikTok, Oracle, the White House or Microsoft did not want to comment on the matter at this time.
TikTok “effectively monitor and control”
Oracle is already one of TikTok’s most important service providers. According to the portal The Verge Oracle provides an essential part of the backbone of TikTok’s server network. Following the potential acquisition, the company should be able to “effectively monitor and control” what goes on TikTok, NPR said, citing an unnamed source. The agreement therefore aims to “reduce Chinese ownership ties”.
The current discussions are completely in line with Trump’s plans to acquire the sale of TikTok which would ensure the continued existence of the app in the US market. His predecessor and Democrat Joe Biden and his government passed a law with great approval that provides for a ban on TikTok in the United States if ByteDance does not sell its US businesses to US investors by January 19 or at least Does not engage in less related discussions. However, that didn’t happen – which is why TikTok went offline briefly in the United States on January 19. After an absence of twelve hours, TikTok came back with the message, Thank you Donald Trump – thanks to him, the service is available again.
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Trump’s controversial decree
Shortly after his inauguration, Trump issued an executive order allowing TikTok to operate for the next 75 days and be supported by service providers such as Oracle. However, it is questionable to what extent this decree is compatible with the law passed by the previous government. For example, Google and Apple have not yet reinstated the TikTok app in their app stores.
Former U.S. Justice Department lawyer Alan Rosenstein argued this week that non-enforcement promises often don’t hold up in court. Furthermore, a breach is actually still being carried out, which only expires after five years. As a result, in the event of a change of government or even with the current government, companies may face hardship in the form of massive penalties. And even before the 75-day deadline expires, Trump could rescind his executive order at any time.
Failure to comply could result in massive fines, which could even see companies jailed for up to a year into Trump’s current term.
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