Plot twists in the TikTok saga continue to emerge daily, with a proposed deal to secure the future of the wildly-popular video sharing platform in the United States now in doubt. Under the deal, which currently appears to be all but a sure thing, California-based computer tech firm Oracle and retail titan Walmart proposed a joint venture called TikTok Global, which would see customer data move to U.S.-controlled infrastructure, and allow TikTok to continue operating in the U.S.
As of September 18, the Department of Commerce, acting on a previously-issued order from the president, announced prohibitions on TikTok, as well as fellow Chinese mobile app WeChat, “to safeguard the national security of the United States.” The ban is subject to an impending court battle, and enforcement of the order could be delayed if the Oracle-Walmart deal goes ahead.
With the consistently developments coming on a daily basis about this hot-button issue, questions remain. Among them: what difference will the Oracle/Walmart deal (if approved) make to the TikTok service; how will it affect the security concerns for governments (and users) in the U.S.; and is this just political posturing with the U.S. elections looming?
The Oracle-Walmart deal
The highly-publicized Oracle and Walmart deal would see the two companies take around 20 percent of TikTok Global, with ByteDance – the Beijing-based owner of TikTok – retaining 80 percent. News reports suggest Walmart and Oracle may pay a combined $12 billion for their stake in TikTok Global. Trump has said he wants $5 billion from companies creating TikTok Global to go into an education fund to teach American children “the real history of our country.”
Earlier in September, ByteDance rejected a plan by Microsoft to buy the U.S. arm of TikTok, thereby, clearing the way for the Oracle deal.
Oracle’s involvement was likely influenced by a recent decision by video meeting software firm Zoom to use Oracle cloud infrastructure. Oracle’s surprise win in that deal over more familiar names such as Amazon Web Services was a public relations boon for Oracle. Walmart was an unexpected contender for the TikTok Global partnership, but it makes sense; access to the TikTok user base opens significant marketing opportunities for Walmart to benefit from a large, younger audience, particularly as the American retail behemoth continue to try to bolster its e-commerce prowess to better compete with Amazon.
What does this mean for TikTok users?
If the deal goes ahead — and that is far from certain — most users will not notice any difference. TikTok users will still be able to make viral videos and confuse non-TikTok users. As TikTok already stores data in the U.S. or Singapore, the move to Oracle-provided infrastructure is unlikely to have any tangible impact on users.
As for the national security concerns cited by the Trump administration, they will likely remain. If ByteDance retains a significant share in TikTok Global, there will still be U.S. concerns over Chinese government influence. The potential for the Chinese Communist Party to demand access to user data through its National Intelligence Law will still be of concern, as the law applies to any Chinese-owned company (and being the majority stakeholder may be enough to enable such powers to be applied).
This has been put to the test yet, but in a similar discussion relating to Huawei 5G technology, China law expert and New York University professor Jerome Cohen said there was “no way Huawei can resist any order from the [People’s Republic of China] government or the Chinese Communist Party to do its bidding in any context, commercial or otherwise.” (Of course the same is true for any U.S.-owned organization thanks to the Clarifying Lawful Overseas Use of Data Act, which gives the U.S. government very similar powers).
Nevertheless, Oracle was quick to provide reassurances over data security, with chief executive Safra Cruz saying he was “100 percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok’s American users, and users throughout the world.”
Setting aside concerns over location and access to user data, the proposed deal would still seem to leave the TikTok algorithms in the hands of ByteDance. This may ultimately cause the deal to fail, and seems to be at odds with Trump’s comment that the deal “… will have nothing to do with China. It’ll be totally secure.”
Paul Haskell-Dowland is the Associate Dean of Computing and Security at Edith Cowan University. Nathalie Collins is the Academic Director of National Programs at Edith Cowan University.