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US government confirms receiving Oracle bid for TikTok
In this file illustration photo taken on April 13, 2020 the social media application logo of TikTok is displayed on the screen of an iPhone in Arlington, Virginia. (Photo: AFP)
Latest News
September 13, 2020

US government confirms receiving Oracle bid for TikTok

WASHINGTON, United States (AFP) — Ahead of a deadline set by President Donald Trump over video sharing app TikTok, US officials will evaluate a bid that could see American tech giant Oracle become a partner to a Chinese company that has been called a national security risk.

Treasury Secretary Steven Mnuchin confirmed on Monday Washington had received a bid from Oracle concerning TikTok’s American operations after the video-sharing app’s parent ByteDance rejected a proposal from Microsoft.

But key details about the deal were murky and it remained unclear whether the venture would pass muster with Washington regulators.

“I will confirm that we did get a proposal over the weekend that includes Oracle as the trusted technology partner,” Mnuchin said on CNBC, adding that the bid would be handled by a government panel that reviews foreign transactions for national security concerns. 

“We need to make sure that the code is, one, secure, Americans’ data are secure, phones are secure, and we’ll be having discussions with Oracle over the next few days with our technical teams,” Mnuchin said.

Oracle confirmed its submission, saying the company “is part of the proposal by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider”.

Trump effectively ordered the sale of the Chinese company’s US operations by September 20, after which the app would shut down.

However Chinese state media outlets CGTN and China News Service on Monday reported that ByteDance will not sell TikTok to Oracle, while The Wall Street Journal said the transaction is being structured as a partnership and probably won’t be an outright sale. All three outlets cited unnamed sources.

– Ban still a threat –

Carl Tobias, a professor at the University of Richmond School of Law, said Oracle’s description of itself under the venture was ambiguous and may not assuage national security concerns.

“It is unclear what Oracle means by saying it will serve as ‘TikTok’s trusted technology provider’. This idea is critical because one major reason for Trump’s executive orders was concern over the threat to national security from Tiktok,” Tobias said.

“Unless much more is done to clarify exactly what the contours of the deal are and how they will work in practice, many observers and I wonder whether the deal will be sufficient to prevent the app’s ban in the US.”

TikTok’s brand of short, quirky videos made on users’ cellphones has grown popular in the United States and beyond, but Trump’s claims that TikTok could be used by China to track the location of federal employees, build dossiers for the purpose of blackmail and conduct corporate espionage has sparked a diplomatic storm between Washington and Beijing.

TikTok has rejected the charges and sued over the crackdown, contending that the US order was a misuse of its International Emergency Economic Powers Act because the platform is not “an unusual and extraordinary threat”.

Last month, China’s commerce ministry published new rules potentially making it more difficult for ByteDance to sell TikTok to an American entity by adding “civilian use” to a list of technologies that are restricted for export.

ByteDance had vowed to “strictly abide” by the new export rules.

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