This news comes following to the deadline set by the US President, Donald Trump on Tik Tok and that Washington officials would assess the bid of Oracle and Tik Tok partnering as the latter has been stated a risk to the national security.
US Treasury Secretary, Mr. Steven Mnuchin has confirmed that a bid from Oracle was received for Tik Tok after the rejection of Microsoft’s proposal. It is believed that the deal would be a ‘structured partnership’ and not a complete sale.
“I will confirm that we did get a proposal over the weekend that includes Oracle as the trusted technology partner,”
“We need to make sure that the code is, one, secure, Americans’ data are secure, phones are secure, and we’ll be having discussions with Oracle over the next few days with our technical teams,”mentioned Steven Mnuchin on CNBC
Further, Oracle has given its confirmation on the same stating, “Is part of the proposal by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider.”
What problem does the US have with Tik Tok?
In 2018, Tik Tok became the most downloaded Chinese app in the U.S., creating history as per a report by TechCrunch then why is the US not happy?
- Earlier, United States Secretary of State, Mike Pompeo stated that the individuals who operate the app were putting the “private information in the hands of the Chinese Communist Party”. They believe that the app could be used to spy on American citizens.
- Donald Trump came up with the statement “It’s big business. Look, what happened with China with this virus, what they’ve done to this country and to the entire world is disgraceful.”
Why was Microsoft rejected?
Tik Tok believes that the US decision has been a misuse of the International Emergency Economic Powers Act as the platform is not “an unusual and extraordinary threat.”
“We believe Microsoft would only buy TikTok with its core algorithm, which the Chinese government and ByteDance was not willing to budge”, mentioned Daniel Ives, Managing Director and Senior Equity Research Analyst covering the Technology sector at Wedbush Securities
Tik tok has been downloaded 175 million times in the United States.
Brad Smith, Microsoft’s president and chief legal officer closely studied Tik Tok and found 2 potential security threats:
- Chinese authorities using existing and new national security laws could structure it to turn over user data. It was observed that Tik Tok monitors the viewing of its users to channel more related content to them and at the same time it does not let the user decide to opt-in or out of it. The only way to avoid this problem was to move the data on servers based in the USA.
- Tik Tok uses a server in Virginia while backs some of its data in Singapore which gives birth to the thought of China being able to access it. It is speculated Microsoft would have located the data in the United States (but so can Oracle).
- The other threat is the ‘disinformation’, which implies that Tik Tok has been developing and designing codes and algorithms that would affect the viewing content of the users (what they saw or did not) for which Microsoft wanted the code and algorithms.
- This would in turn lead to Microsoft working in close coordination with TikTok’s engineers to screen the major changes and create them reviewable by the US government for security reasons before releasing it into production.
These reasons led to the rejection of Microsoft and confirmation of Oracle as recently.