TikTok has finalized a joint venture agreement that will enable it to continue its operations in the United States, five years after former President Donald Trump threatened to ban the platform over privacy and national security issues. The deal, involving ByteDance, Oracle, Silver Lake, and Abu Dhabi's MGX, aims to address concerns regarding data protection and algorithm security while allowing ByteDance to maintain control over its core US business functions.

Joint Venture Structure
Under the new arrangement, the joint venture will manage essential aspects of TikTok's US operations, which include data protection, content moderation, and algorithm security. TikTok's CEO, Shou Zi Chew, clarified in a memo to employees that ByteDance will still oversee US operations, particularly in revenue-generating areas such as e-commerce, advertising, and marketing. The joint venture will consist of Oracle, Silver Lake, and MGX, each holding a 15% stake, while existing ByteDance investors will control 30.1%. ByteDance itself will own 19.9%, adhering to US foreign ownership regulations.

Historical Context
The agreement comes after a tumultuous period for TikTok in the US, where it has amassed over 130 million users. In 2020, the Trump administration issued an executive order threatening to ban the app, citing national security risks associated with data potentially being accessed by the Chinese government. TikTok has consistently denied these allegations. Following this, Congress passed legislation that restricted ByteDance's operational ties with TikTok US, leaving the future of the platform uncertain.

Approval and Oversight
The joint venture has received approval from Trump, who stated that the agreement would value TikTok's US operations at approximately $14 billion. The new structure will be overseen by a seven-member board of directors, with a majority of American members. According to Chew's memo, the US joint venture will operate independently, focusing on data protection and algorithm security to ensure the platform's content is not subject to external manipulation.

Future Implications
The deal represents a significant step in resolving the ongoing concerns regarding TikTok's operations in the US and its relationship with China. With Oracle overseeing the algorithm that recommends videos to US users, the system will be retrained using domestic data to enhance security and user trust. Despite these advancements, the Chinese government will retain control over the algorithm, as confirmed by its cybersecurity regulator.

Wrap-up
The joint venture agreement marks a pivotal moment for TikTok, alleviating some of the uncertainty surrounding its operations in the US while navigating complex international relations. As the platform continues to grow, the implications of this deal will likely influence discussions about data privacy and national security in the digital age.

Sources
theguardian.com

@hoju-korean.com Editorial Team