TikTok isn’t being sold to Microsoft, and it looks like it’s not being sold to Oracle either. Instead, with Microsoft completely out of the loop, a new deal has been struck between Oracle and TikTok with the former coming in as a tech partner and stakeholder. What does this mean for TikTok, and what does this mean for data privacy down the line?
Oracle is an American organisation that was one of the first tech companies of its kind, specialising in selling database technology and cloud systems to other businesses. With a secure foothold within the US government intelligence community, having completed contracts for the CIA, Navy Intelligence, Air Force Intelligence and the National Security Agency, but not only that—the company holds more of our data than let on.
The tech giant’s clients and cloud-based services have extended from it’s initial national security involvement to retailers such as the UK’s Co-op and Debenhams chains, as well as the auto-makers Mazda and Yamaha, and more. Oracle’s co-founder and current chairman Larry Ellison previously said in Jeffery Ronsen’s book The Naked Crowd that “The information about your banks, your checking balance, your savings balance, is stored in an Oracle database,” even “Your airline reservation is stored in an Oracle database. What books you bought on Amazon is stored in an Oracle database. Your profile on Yahoo! is stored in an Oracle database… Privacy is already gone.”
TikTok’s parent company ByteDance won’t be selling off TikTok’s US operations after all, with just two days before the deadline set by Microsoft, who was also on the line to take control of TikTok. Instead, Oracle won the deal to manage TikTok’s US cloud operations and data. This deal however is not structured as an outright sale, but rather as a partnership, and it is up for a review from the White House before going any further.
US officials were concerned that user information could be passed to China’s Communist Party government if the sale to Microsoft went through. TikTok, which has as many as 100 million US users, has said it would never share such data with Chinese authorities. After President Donald Trump threatened to shut the app down in the US if a deal did not go ahead, Reuters also reported that China would also rather have the app shut down in the US than allow a forced sale.
That’s why ByteDance’s latest proposal stated that the company would not sell TikTok’s operations to Oracle or Microsoft, and would not give the source code for the platform to any US firm—but Oracle would now become the firm’s technology partner and manage all of the app’s user data, and ByteDance would negotiate Oracle’s stake in TikTok’s US operations. For now, all of the video-sharing app’s current data is stored in Alphabet Inc’s cloud. Soon enough, it could be stored on Oracle’s cloud instead.
TikTok and Oracle have submitted a bid to the US government for the American tech company to become ByteDance’s ‘trusted technology partner’ in the US, which is an agreement finally reached after a long term battle with Trump going as far as to threaten the banning of the app. Both companies now await the outcome of their bid and according to The Wall Street Journal who first reported the proposed deal, TikTok stated that it believed the deal “would resolve the Administration’s security concerns.”
Trump wants a US tech firm to own most of TikTok in the United States, and it is unclear whether he will approve the deal. US Treasury Secretary Steven Mnuchin told CNBC on Monday the administration would review it this week, but said in the meantime that “I will just say from our standpoint, we’ll need to make sure that the code is, one, 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.”
Mnuchin also said that this proposal includes a “commitment” to bring 20,000 new jobs, along with TikTok’s headquarters to the US, as TikTok currently bases its US operations out of Beijing. However, even with its HQ being transferred to US soil, the government’s national security concerns over foreign control of Americans’ data is high, as Oracle would “assume management of TikTok’s US user data,” as reported by Reuters.
According to Business Insider, doubt was recently cast on TikTok’s US buyer’s access to the app’s renowned algorithm after the Chinese government imposed new restrictions on the export of artificial intelligence technology. If Oracle’s deal is not an outright sale as it looks to be, this issue could be inconsequential.
The Committee on Foreign Investment in the United States (CFIUS), which reviews deals for national security risk, will be overseeing the ByteDance-Oracle talks and a separate review will take place with the Trump administration.
Regulatory lawyer John Kabealo, who is not involved in the talks, also commented that the “User data protection and assurances around how the company’s algorithms push content to US users are thoughtful components of a substantive solution, but whether they can change political outcomes is a much more difficult question.”
China’s foreign ministry spokesman Wang Wenbin declined to comment on Monday when asked at a press conference about the TikTok deal, but as reported by Reuters, TikTok was being “encircled” and “coerced” in the US into a transaction. “We urge the US government to provide an open, fair, just and non-discriminatory environment for foreign firms operating and investing in the United States,” he said.
Further information that was gathered by a Reuters and Ipsos national poll showed that as many as 40 per cent of Americans back Trump’s threat to ban TikTok if it is not sold to a US buyer. Among Republicans—Trump’s party—69 per cent said they supported the order, though only 32 per cent expressed familiarity with the app.
The Verge commented that Oracle has had a history of collaboration with the US government, which could make this partnership with TikTok a strategic move amid the growing undercurrent of Chinese opposition running through the White House and Congress. Department of Commerce secretary Wilbur Ross told The Verge that “the Department of Commerce is operating under a deadline of September 20,” so the future of TikTok and Oracle has just five days more to evolve on their path. The clock is ticking—bad pun intended.
For a great many of us, the prospect of a world without Instagram or Facebook is simply inconceivable. It is easier to imagine a reality in which oxygen is no longer free than to picture one in which likes and Stories are nonexistent. But the surging popularity of a new Chinese app called TikTok may be signalling the twilight of the Facebook app dynasty (including Instagram and Messenger) and the rise of a new ruler of the social media realm. In 2018, TikTok’s download rates surpassed those of Instagram and Facebook, and have continued to rise in the past few months throughout the U.S., Europe, and Southeast Asia.
TikTok is one of the most recent creations by ByteDance—a Beijing based tech company that produces machine learning-enabled content platforms. TikTok’s first incarnation emerged in 2016 in the form of Douyin—a media app for sharing and creating videos exclusively for the Chinese market. In 2017, ByteDance merged the Chinese app Musical.ly (which was highly popular in the West) with Douyin to create TikTok, an app that resembles Snapchat but centres exclusively around enhanced micro-video content. The merge with Musical.ly proved to be seamless, as the majority of the former app’s users and influencers quickly adapted to TikTok.
Initially, TikTok did not pose a significant threat to social media behemoths such as Instagram, Facebook, YouTube, and Snapchat. But the tide is rapidly turning.
Ensnared in myriad scandals, the public’s trust in Facebook has been steadily plunging, and along with it its stock value. Last year, the company lost $120 billion after warnings that its revenue growth will plummet. But sizzling scandals and stock-market undulations are not the only soft-spots of Facebook, as its primary flaw seems to be its inability to appeal to the youth. With its flagship app gradually becoming a virtual nursing home—where grandmas and millennials vent their scorn and stalk old lovers who may not even be alive at this point—and Instagram failing to penetrate the Gen Z market, the Facebook ‘family’ appears to be in the early stages of its downfall. For a moment, Snapchat seemed to be the next ‘it’ app, but that hope never materialised.
This is where TikTok beats them all. The youth, which appears to be increasingly interested in the app’s features and responds favourably to its user interface is migrating to the platform en masse.
Unlike other social media apps, TikTok’s function is fairly limited, as all it enables users to do is create 15-second videos and share them with their network. Yet ByteDance managed to tap right into the core of youth’s fascination with micro-video content that’s light and entertaining, by offering a wide variety of effects and editing options (something that’s lacking from Facebook and Instagram stories). And so TikTok serves Gen Z and soon Alpha precisely what they’re after—content that is live, short, potentially-viral, and, well… silly.
The app’s popularity has been exploding over the past year. In 2018, TikTok was the fourth most downloaded non-game app, with 663 million new downloads, surpassing Instagram which gained 444 new downloads. In the App store alone, TikTok’s download rates exceeded those of Facebook, Messenger, and WhatsApp. Should the numbers remain steady, TikTok can be expected to surpass Facebook and Instagram in overall popularity worldwide (let us not forget that it also dominates the Southeast Asian market, something that Western apps are unable to do due to censorship barriers).
The conquering of the social media landscape by TikTok could have several ramifications. Firstly, it would most likely alter the way in which the future generation communicates, with words and pictures replaced by short, heavily edited memes.
It would also generate significant changes in the market, which currently relies heavily on the models of existing social media platforms, such as Instagram. In a TikTok-dominated world, influences, businesses, and corporations will have to find a new way to promote their products, capture the attention of buyers, and adapt to new metrics indicating popularity and profitability.
Finally, what would be the consequences of having a Chinese company owning all our social-media data? This question may be too vague to answer with certainty, but China’s policies regarding censorship, surveillance, and curtailing of freedom of speech sure make this prospect unsettling (to put it mildly).
On a more personal level, a TikTok takeover gives us a chance to reexamine our interaction with social media. Before replicating our virtual lives onto yet another platform we, the veterans of the social media revolution, must ask ourselves: where are we going with this? Do these platforms contribute to or impede our personal and spiritual growth? What toll have they been taking on our mental wellbeing? Can our thoughts and feelings and aspirations be effectively expressed in a 15-second video? And what would be the consequences for doing so?
The rise of TikTok gives us a golden opportunity to question. To prioritise. To reconsider the value of life beyond the screen.