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TikTok submits plans for Oracle alliance to US government

By Chris Cooke | Published on Tuesday 15 September 2020

TikTok has confirmed it has submitted proposals to the US government that it hopes will allay the concerns of President Donald Trump regarding its operations in America. The US government has confirmed it has received those proposals and that they involve technology firm Oracle. And Oracle has confirmed that is correct. Good times.

Trump last month, of course, issued an executive order that will ban the use of TikTok within the US unless the app basically sells its American business to an American company. That’s in theory based on the concern that the Chinese government currently has access to TikTok’s global audience and user-data, because it is owned by China-based Bytedance.

For its part, Bytedance denies those allegations and says that Trump’s executive order is unconstitutional. However, it has also been busy looking into doing a deal with a American firm that would address the US government’s concerns and result in the ban being voluntarily called off.

It was thought that the outcome of that would be Microsoft buying outright the TikTok business within the US, and probably some other markets like Canada, Australia and New Zealand. But last weekend it was confirmed that would not happen and instead Oracle is set to become TikTok’s US “technology partner”.

In a short statement yesterday, TikTok said: “We can confirm that we’ve submitted a proposal to the US Treasury Department which we believe would resolve the administration’s security concerns”.

“This proposal”, it went on, “would enable us to continue supporting our community of 100 million people in the US who love TikTok for connection and entertainment, and the hundreds of thousands of small business owners and creators who rely upon TikTok to grow their livelihoods and build meaningful careers”.

The US Treasury Secretary Steven Mnuchin then confirmed to CNBC that he had received TikTok’s proposals. He also confirmed – unlike TikTok itself – that Oracle becoming the app’s “trusted technology partner” was a key part of that plan.

That then resulted in a short statement from Oracle, which said that it could confirm “Secretary Mnuchin’s statement that it is part of the proposal submitted by Bytedance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider. Oracle has a 40 year track record providing secure, highly performant technology solutions”.

Mnuchin said that the Committee On Foreign Investment In The United States would now review those proposals before making a recommendation to Trump.

In his CNBC interview, Mnuchin said that, in that review “we’ll need to make sure that the code is … secure, Americans’ data is secure, that the phones are secure and we’ll be looking to have discussions with Oracle over the next few days with our technical teams”.

In many ways what TikTok is proposing via its partnership with Oracle isn’t anywhere near as radical a move as it was implied would be necessary to placate the app’s critics in Washington.

However, cynics are noting that Oracle boss Larry Ellison is one of Trump’s few supporters in the tech sector, and that alone could be the big sweetener needed to get this proposal signed off by the US government.

A commitment to expand TikTok’s on-the-ground presence in the US creating thousands more jobs is also likely to be part of any deal, allowing Trump to say “we’ve dealt with the data problems, we’ve created more jobs, screw you China”, while still allowing a major app that is ultimately Chinese owned to continue operating in the US.