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Executive Summary:
Oracle is gaining traction as the leading candidate to partner with TikTok in the U.S., aiming to address national security concerns by overseeing user data and operational safeguards. Under a proposed deal, Oracle would collaborate with TikTok and its parent company, ByteDance, to ensure U.S. data security—while ByteDance would retain control of TikTok’s recommendation algorithm.
However, the proposed structure appears to conflict with the newly enacted Protecting Americans from Foreign Adversary Controlled Applications Act, which requires that foreign entities own less than 20% of platforms like TikTok, have no control over operations, and no involvement in data or algorithmic functions. ByteDance’s continued control of the algorithm would likely violate these conditions.
Chinese officials have already rejected the idea of selling TikTok’s algorithm, making a compliant deal difficult. Although the Biden administration (and Trump, who has weighed in) may be close to favoring Oracle’s proposal, final approval hinges on legal compliance and diplomatic negotiations. The U.S. government has until April 4 to finalize a solution, though an extension remains possible.
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