Oracle eyeing TikTok operations as it spins off into a separate entity

5 min read | September 17, 2020 01:11 PM AEST | By Team Kalkine Media

Oracle eyeing TikTok operations as it spins off into a separate entity

TikTok’s Privacy and Security Concerns

TikTok is one of the highly popular entertainment video apps which has a massive craze among teenagers. The United States officials are concerned over the app's real intentions. They have said that the app developers could be passing the information to China's Communist Party government.

TikTok currently enjoys 100 million users in the U.S.

The developers had stated that they do not share data with Chinese authorities. However, the company's privacy policy has the rights to share any information with the Chinese authorities, claims ByteDance.

Last month China updated its export control rules after which the sales negotiations went on a backtrack. The media reports also stated that China might be able to see the shutdown of the app rather than allowing the United States to force a sale. Giving TikTok's algorithm to a foreign buyer has also been an issue.

More on ByteDance- Oracle deal

ByteDance recently submitted a proposal to the U.S. Treasury Department in which it stated that Oracle would be positioned as TikTok's "trusted technology provider."

Following the announcement, Oracle shares went up by 6.3 per cent.

As per the media reports, ByteDance's latest proposal to the U.S. authorities, Oracle will serve on the management of TikTok's U.S. user data.

Currently, Oracle is negotiating its position in TikTok's U.S. operations. Its data is presently stored in Alphabet Inc's cloud and has a backup in Singapore. The media reports say that ByteDance's top investors such as General Atlantic and Sequoia will receive minority states in those operations.

Did You Read: Chinese Arrest Escalates the US-China Tensions, TikTok Ban Also on the Cards

The U.S. President Approval

Though the deal is in the process, it is unclear whether the U.S. president will approve of the agreement.

Treasury Secretary Steven Mnuchin stated that the administration is reviewing the deal. He said the government is looking for a company which will work towards the goal of keeping U.S. citizens’ data safe and secured. The technical teams will shortly get in touch with Oracle and discuss the same.

He also said the deadline to meet the proposal and finalise on a deal was September 20. As per the new agreement, the company will have to launch its headquarters in the U.S. and generate 20,000 new jobs.

Foreign Investment in the United States (CFIUS) Committee reviews such deals pertaining to the national security risk. They are currently administrating the ByteDance-Oracle proposal. Steven Mnuchin mentioned that the Trump administration would have a separate national security review on the same.

Also Read: Trump Passed Executive Order Against WeChat, TikTok in the US

Oracle's security system

Oracle is considered to be a safe option for the deal with ByteDance, as the company already has its footprint in the database technology and cloud system. Oracle was one of the first technology companies to assist businesses with database structuring of their records.

Some of the industry experts also suggest that the Oracle has more profound relationships with the U.S. government and the company is much more than a Silicon Valley start-up.

The company has a broader range of clients and also offers cloud-based services to customers. Automakers such as Mazda and Yamaha as well as retail giants U.K.'s Co-op and Debenhams chains are some of the Oracle's clients.

Also Watch: Oracle beats Microsoft in the TikTok US deal Race

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