Mnuchin: US Will Review Oracle Bid to Buy TikTok
Posted: Mon Sep 14, 2020 8:57 amU.S. Treasury Secretary Steven Mnuchin said Monday the Trump administration would review a bid this week by Oracle Corp. to buy the Chinese-owned short video app TikTok to make it a U.S.-headquartered company.
FILE - Treasury Secretary Steven Mnuchin testifies before the House Select Subcommittee on the Coronavirus Crisis, during a hybrid hearing, Sept. 1, 2020, on Capitol Hill in Washington.
Mnuchin told CNBC that the U.S. government has “a lot of confidence in both Microsoft and Oracle,” the two firms TikTok had been considering selling to.
But after ByteDance, the owner of TikTok, chose Oracle, Mnuchin said, “We'll be reviewing it with their technical teams and our technical teams to see if they can make the representations" to keep data on American phones safe.
The Trump administration has given ByteDance until September 20 to make a deal or stop operating inside the U.S.
On Sunday, the New York Times reported that Microsoft’s bid was rejected by ByteDance and that the Chinese company said that Oracle would be its “technology partner.” It’s unclear the terms of the deal being discussed.
In a statement, Microsoft said its proposal “would have been good for TikTok’s users, while protecting national security interests. 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.”
The fate of TikTok in the U.S. hangs in the balance as it approaches the Trump administration deadline. In recent months, the video app has become a focus of U.S.-China tensions with the administration accusing the company of being answerable to the Chinese government, a claim that TikTok has denied.
In August, President Donald Trump issued an executive order banning TikTok and WeChat, the Chinese messaging app.
But even with security concerns about TikTok, Americans have continued to download the app. By end of last March, TikTok saw more than 300 million downloads in the U.S., according to Go.Verizon’s data.
Microsoft, together with Walmart, pursued a deal with ByteDance. A second group of investors led by Oracle emerged as a possible bidder. Oracle is one of the few Silicon Valley firms with top executives who have held political fundraisers for Trump ahead of his November 3 re-election contest against former Vice President Joe Biden.
As the negotiations progressed, the Chinese government changed its export rules stopping TikTok from selling its valuable recommendation algorithm, dubbed “For You,” which queued up the next video for a user to watch.
It’s unclear if any deal with Oracle would involve the algorithm.