OPINION
TikTok’s Chinese parent company ByteDance announced on Thursday (Jan. 22) it has finalized a deal with the U.S. to avoid a ban in the country.
The deal will create a new majority-American-owned joint venture, TikTok USDS Joint Venture LLC, aimed at protecting U.S. user data.
It is a major step after years of scrutiny by U.S. President Donald Trump, who in 2020, unsuccessfully tried to ban the app over national security concerns.
In a post on Thursday, Trump said he is “so happy to have helped in saving TikTok.”
He also lauded the deal, thanking Chinese President Xi Jinping for “working with us and ultimately approving the deal.”
Under the agreement, American and global investors will own 80.1 per cent of the venture, while ByteDance keeps the rest.
Tech giant Oracle, private equity group Silver Lake, and Abu Dhabi-based MGX will serve as managing investors, each holding 15 per cent.
A White House official says both the U.S. and Chinese governments have approved the deal.
The joint venture company will retain and secure TikTok’s algorithm using only U.S. data, which will be secured on Oracle’s cloud system.
Reuters sources said last year that ByteDance would still own TikTok’s U.S. operations, but that control of data, content, and algorithms would shift to the new venture company.
Is TikTok Really Secure?
Observers cast doubt that U.S. data will be safe.
TikTok’s core technology and algorithms are still developed by ByteDance, a China-based company.
Even though the joint venture will be responsible for securing TikTok’s recommendation algorithm, the developer could still act maliciously.
This risk remains unless the developer ByteDance, in this case, is trustworthy.
Notably, data can be stored in the U.S. but engineers in China may still have indirect access through software updates or maintenance.
On top of that, China’s law requires Chinese-based companies to provide information or data to the government if requested.
This policy does not change with a joint venture.
