Georgia Wells and Aaron Tilley, Wall Street Journal:
Oracle Corp. won the bidding for the U.S. operations of the video-sharing app TikTok, people familiar with the matter said, beating out Microsoft Corp. in a high-profile deal to salvage a social-media sensation that has been caught in the middle of a geopolitical standoff.
Oracle is set to be announced as TikTok’s “trusted tech partner” in the U.S., and the deal is likely not to be structured as an outright sale, the people said.
The next step is for the White House and the Committee on Foreign Investment in the U.S. to approve the deal, said one of the people, adding that the participants believe it satisfies the concerns around data security that have been previously raised by the U.S. government.
Right now, it is unclear what describing Oracle as a “trusted tech partner” really means. It doesn’t include TikTok’s recommendation algorithm, according to Zhou Xin and Tracy Qu of the South China Morning Post:
ByteDance, the Beijing-based parent company of TikTok, will not sell or transfer the algorithm behind the popular video-sharing app in any sale or divestment deal, according to a source briefed on the Chinese company’s boardroom discussions.
With a looming US deadline for ByteDance to sell TikTok’s US operations, the source said: “The car can be sold, but not the engine.”
China’s regulators recently tightened export controls that would prevent its sale or transfer. The Journal reports that TikTok — not ByteDance — would become a U.S.-based company, according to Steve Mnuchin, but Elizabeth Nolan Brown of Reason pointed out last month that it is already headquartered in Culver City with servers in Virginia.
So if Oracle doesn’t get the algorithm and it is not actually acquiring the app, what does this accomplish as a “tech partner”?
The mysterious Kontra:
A: In addition to being a database giant and a top public sector contractor, Oracle also owns a huge set of mostly unregulated personal data collection/measurement services like BlueKai, DataLogix, Moat, AddThis, CrossWise, etc.
Q: Why pursue TikTok?
ByteDance has already committed Google’s hosting services for TikTok through 2022, according to Kevin McLaughlin and Amir Efrati of the Information, but this forced sale could require its move to Oracle’s hosting. Then it becomes a U.S.-based surveillance tool — but that does not necessarily exclude Chinese companies from scooping up plenty of user data anyhow.
And then there’s the pesky matter of whether Oracle is, you know, “trusted”. Zack Whittaker, reporting for TechCrunch just three months ago:
One of those startups, BlueKai, which Oracle bought for a little over $400 million in 2014, is barely known outside marketing circles, but it amassed one of the largest banks of web tracking data outside of the federal government.
BlueKai uses website cookies and other tracking tech to follow you around the web. By knowing which websites you visit and which emails you open, marketers can use this vast amount of tracking data to infer as much about you as possible — your income, education, political views, and interests to name a few — in order to target you with ads that should match your apparent tastes. If you click, the advertisers make money.
But for a time, that web tracking data was spilling out onto the open internet because a server was left unsecured and without a password, exposing billions of records for anyone to find.
A truly staggering display of security and privacy incompetence. Being solely concerned about surveillance of the world by authoritarian and genocidal nations means nothing without meaningful restrictions on the source of that data. Companies like Oracle are directly responsible for enabling mass surveillance, even if they frame it under the guise of “targeted advertising”.
By the way, if you’re thinking, “why Oracle?”, the answer is predictably grift-driven. Ina Fried and Kyle Daly, Axios:
Oracle’s CEO Larry Ellison is a prominent Trump supporter and the company has close ties to the administration. That could give the company an edge in trying to win White House approval for a deal that might not meet all the demands Trump has made.
The president has said that TikTok must become a fully U.S.-owned company — so the “trusted technology partner” approach may not fly.
We should know by the end of the week if this arrangement is approved — and if the president will get his “key money” to drive home the blatant corruption angle.