The proposed partnership between Oracle and TikTok, aimed at securing the app’s U.S. operations, is gaining traction. However, this deal now faces serious legal challenges from a new U.S. law designed to limit foreign control over applications. The core conflict revolves around ByteDance’s insistence on retaining its valuable algorithm, a stance that puts the entire arrangement at risk of being blocked, leaving TikTok’s future in the United States uncertain.
Understanding Oracle’s Proposed Role
Oracle has stepped forward not as a buyer, but as a potential “trusted technology partner” for TikTok in the United States. This role is designed specifically to calm the national security fears that have surrounded the popular app for years.
The primary goal of this arrangement is to create a secure environment for American user data. Under the proposal, Oracle would oversee the operational and security functions to ensure everything complies with U.S. regulations.
This approach tries to satisfy Washington’s demands without forcing a full sale of TikTok’s U.S. operations. The key responsibilities for Oracle would include:
- Working with any potential U.S. buyers to verify and maintain data security.
- Confirming that no backdoor access exists that could be exploited by Chinese authorities.
- Creating a framework that addresses legal concerns while allowing ByteDance to keep its valuable algorithm.
This solution mirrors earlier discussions but may not be enough to satisfy the requirements of the new law.
The New Law’s Strict Requirements
A major hurdle for the Oracle deal is the recently passed “Protecting Americans from Foreign Adversary Controlled Applications Act.” This legislation sets non-negotiable conditions for apps like TikTok to continue operating in the country.
The law is very specific about what constitutes foreign control. If ByteDance retains full control over TikTok’s powerful recommendation algorithm, the deal would likely be in direct violation of the law. This single issue is the biggest sticking point preventing the deal from moving forward smoothly.
Here is a simple comparison of the law’s demands versus the current proposal:
| Legal Requirement | Oracle-TikTok Proposal | Conflict Status |
|---|---|---|
| Foreign entities own no more than 20%. | ByteDance retains core technology and influence. | Potential Violation |
| No direct operational control by foreign entities. | ByteDance would still control the algorithm. | Direct Violation |
China’s Unwillingness to Sell Complicates Everything
The Chinese government’s position adds another significant layer of complexity to the situation.
Beijing has made it clear that it will not permit the forced sale of TikTok’s algorithm. Chinese officials consider the algorithm to be proprietary technology that falls under the country’s export control laws, meaning the government must approve any sale.
This firm stance has been a major obstacle in past negotiations and remains the central point of disagreement. It creates an impasse where ByteDance is caught between the demands of the U.S. government and the restrictions of its home country.
What is Next for TikTok’s U.S. Future?
With legal deadlines approaching and political pressures mounting from both sides, the future of TikTok in the U.S. is hanging in the balance. Several outcomes are possible, but none of them are simple.
The most severe possibility is a complete ban of the application if a legally sound deal is not finalized. Another scenario involves ByteDance finding a way to separate the algorithm from U.S. operations, though this is technically complex and politically unlikely given China’s position.
A third, less probable, outcome could be the U.S. government granting an exception or modifying its stance, but this would likely face significant political backlash.
For now, TikTok’s 170 million American users can continue using the app, but uncertainty looms large. The standoff between U.S. law and Chinese policy will determine whether the platform has a future in one of its biggest markets.
