Oracle outsmarts Microsoft for TikTok’s US operations: Report

Chinese short video app TikTok owner ByteDance told the US tech giant it wouldn't be selling to the company, Microsoft announced in a Sunday blog post.

New Delhi: Oracle has reportedly agreed to acquire TikTok’s US operation that does not include a full sale of the popular video app from its China-based parent ByteDance, weeks after President Donald Trump issued an executive order that threatened to ban the app unless it was sold to an American company.

Microsoft has said that ByteDance had rejected its bid to acquire TikTok’s US operations, leaving Oracle as the only remaining suitor, as September 20 deadline looms for the Chinese firm to sell or shut down its US operations. TikTok owner ByteDance told the US tech giant it wouldn't be selling to the company, Microsoft announced in a Sunday blog post.

"We are confident our proposal would have been good for TikTok’s users, while protecting national security interests," the company mentioned in a statement. "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."

As part of the deal, Oracle is considering addressing the national security issues the Trump administration has flagged over the Chinese video app TikTok, the Finacial Times (London) reported, citing people familiar with the development. Earlier, the financial daily reported that Oracle was keen to do a deal alongside General Atlantic and Sequoia Capital, both of which are major investors in TikTok’s Chinese parent company. Also, Sequoia and General Atlantic have representation on ByteDance’s board.

In August, Oracle had said it was in discussion to buy TikTok’s operations in the US and three other countries.

Worth mentioning here is that Oracle has a strong relationship with the Trump’s administration as the business software provider CEO Safra Catz was a member of President Trump’s transition team, and Larry Ellison, the company’s co-founder, chairman and chief technology officer, hosted a fundraising event for Trump’s election campaign earlier this year. TikTok boasts it has 100 million users in the US and about 700 million globally.

The Committee on Foreign Investment in the United States, known as CFIUS, a US government group chaired by the Treasury Secretary, would examine the deal for national security reasons. President Trump can approve or reject a deal recommended by the committee, though the president has backed Oracle as a “great company” that that could manage the acquisition.

At present, the structure of the deal isn’t known. It was more proper to call the Oracle transaction as a partnership rather than an acquisition as there wasn’t an exchange of vital assets, The Wall Street Journal reported citing people with knowledge of the matter.

To recap, the US has pushed for a sale, highlighting concern that TikTok could pass on significant data it collects from Americans streaming videos to the Chinese government.