TikTok's US Deal: A Year Later, What's Changed?

TikTok US Deal Status

• 🤝 A binding agreement has been signed with three managing investors for a new US TikTok entity: Oracle, Silver Lake, and MGM.
• 🗓️ The deal is expected to close on January 22nd, one year after the original divestiture deadline.
• ⚠️ Significant work remains to be done, according to the TikTok CEO, despite the impending closing date.

Ownership and Control

• 🇺🇸 While the deal aims for majority American investors, the inclusion of MGM, an Emirati firm, raises questions about true US ownership.
• 📊 ByteDance will retain just under 20% ownership (19.9%), complying with the law, with other ByteDance affiliates holding additional stakes.
• 🔑 A major sticking point is ByteDance retaining control over crucial aspects like e-commerce (TikTok Shop) and leasing its algorithm to the new US venture.

National Security Concerns

• 🇨🇳 Experts believe China is coming out with a favorable deal, as ByteDance is not fully severing ties with TikTok US as required by law.
• 🏛️ The US government's potential involvement in overseeing the algorithm and content moderation, similar to China's control over Douyin, is a significant concern.
• 🤝 The deal's terms, especially regarding investor influence and potential US government partnership with Oracle, remain unclear and raise questions about data protection and content manipulation.

Political Landscape

• 📉 The political will to pursue action against TikTok has dwindled, with key advocates moving on to other issues.
• 🗣️ Despite the complexities, former President Trump is expected to frame the deal as a win for his administration, highlighting his ability to navigate the situation where Biden did not.
• 🌍 The situation is complicated by the interconnectedness of global business, with companies like Oracle having international dealings, adding layers of complexity to the national security considerations.