Oracle Wins Bidding for TikTok in U.S., After Microsoft Proposal Rejected -- Update
14 Septembre 2020 - 02:32AM
Dow Jones News
By Georgia Wells and Aaron Tilley
Oracle Corp. won the bidding for the U.S. operations of the
video-sharing app TikTok, a person familiar with the matter said,
beating out Microsoft Corp. in a deal to salvage a social-media
service that has been caught in the middle of a geopolitical
standoff.
Oracle is set to be announced as TikTok's "trusted tech partner"
in the U.S., and the deal is likely not to be structured as an
outright sale, the person said.
Microsoft earlier Sunday said in a statement that it was
notified earlier in the day of the decision by TikTok parent
ByteDance Ltd.
"We are confident our proposal would have been good for TikTok's
users, while protecting national security interests," the statement
said. "To do this, we would have made significant changes to ensure
the service met the highest standards for security, privacy, online
safety, and combatting disinformation, and we made these principles
clear in our August statement. We look forward to seeing how the
service evolves in these important areas."
The move by Beijing-based ByteDance comes days after the Chinese
government threw negotiations into doubt when it issued new export
restrictions late last month on the kind of artificial intelligence
technology TikTok uses. The algorithms, which determine the videos
served to users and are seen as TikTok's secret sauce, were
considered part of the deal negotiations up until the Chinese
policy change raising questions among the parties involved in
negotiations over how to value the social-media business.
President Trump has said repeatedly that he would shut down
TikTok in the U.S. if it isn't sold to an American company by Sept.
15, though it isn't clear if that is the operative deadline. In an
Aug. 6 executive order, the White House gave ByteDance a 45-day
deadline before it would ban the app, which the Trump
administration says poses an economic and national-security threat
to U.S. interests, if it isn't sold to a U.S. buyer. That gives the
parties until Sept. 20 to seal a deal.
TikTok has soared to around 100 million monthly users in the
U.S., from about 11 million in early 2018, and they are considered
among the most lucrative in the app's global user base of about 689
million, though the app still loses money.
The Trump administration has pushed for a sale, expressing
concern that TikTok could pass on data it collects from Americans
streaming videos to China's authoritarian government. TikTok has
said it hasn't been asked to share data with the Chinese government
and wouldn't do so if asked.
Write to Georgia Wells at Georgia.Wells@wsj.com and Aaron Tilley
at aaron.tilley@wsj.com
(END) Dow Jones Newswires
September 13, 2020 20:17 ET (00:17 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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