TikTok owner signs deal to avert US ban

TikTok’s Chinese parent company, ByteDance, has signed binding agreements with US and international investors to restructure the app’s American operations, a move aimed at averting a nationwide ban over national security concerns, the company said on Thursday.

In a memo to employees, TikTok chief executive Shou Zi Chew said the new joint venture will be jointly owned by ByteDance and a group of investors including Oracle, Silver Lake and Abu Dhabi-based investment firm MGX. The deal is expected to close on January 22.

Under the agreement, ByteDance will retain a 19.9% stake in the US business. Oracle, Silver Lake and MGX will each hold 15%, while affiliates of existing ByteDance investors will own the remaining 30.1%.

The deal would bring to an end years of pressure from Washington to force ByteDance to divest TikTok’s US operations over concerns that the app could be used by China for surveillance or influence campaigns.

It follows a framework unveiled in September, when then-president Donald Trump delayed enforcement of a law that would have banned TikTok unless it was sold. The legislation, passed by Congress in April 2024 during President Joe Biden’s administration, was originally due to take effect on January 20, 2025, but was repeatedly postponed as negotiations continued.

TikTok said the agreement would allow “over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community.”

The White House has previously said Oracle will license TikTok’s recommendation algorithm under the deal, while the algorithm will be retrained using US user data to limit the risk of external manipulation.

Despite the agreement, critics remain sceptical. Senator Ron Wyden of Oregon said the deal would not adequately protect the privacy of American users, arguing that it remains unclear whether the app’s algorithm would be placed in safer hands.

The deal comes amid broader US-China tensions over trade and technology. Analysts say TikTok has increasingly become a bargaining chip in diplomatic negotiations between the two countries.

Small business owners who rely on TikTok for marketing have also expressed cautious optimism. TikTok says more than seven million small businesses use the platform in the United States.

Oracle and Silver Lake declined to comment on the agreement, while the White House referred inquiries to TikTok. MGX has not yet responded to requests for comment.

Source: BBC