The Genesis of the Deal: National Security Concerns

In the summer of ‍2020, the Trump administration raised⁢ serious concerns about TikTok’s data privacy practices and its potential ⁤ties ⁢to the⁣ Chinese government. These concerns stemmed from TikTok’s ownership by ‍ByteDance, a Beijing-based company. The administration feared that the Chinese government⁤ could compel ByteDance to share user data,censor content,or spread propaganda.

Specifically, the Committee on Foreign Investment in the United states⁤ (CFIUS) investigated⁤ TikTok and determined that the app posed a national security risk. ⁣ This⁤ led to a series of executive orders aimed at restricting TikTok’s ⁢operations‍ in the U.S.

The initial executive orders, issued in August 2020, sought to ban TikTok and WeChat (another chinese-owned app) from the ‍U.S.app stores. However, these orders faced legal challenges, and the implementation was stayed ⁤by federal courts.

The Proposed deal: Oracle and Walmart to the Rescue?

To circumvent a complete ban and address national security ⁣concerns, a deal was proposed ‍involving Oracle ‍and Walmart. The proposed structure involved the creation of a new U.S.-based company, TikTok⁢ Global, with Oracle ⁤holding a minority stake.Walmart was also slated to participate in the ⁢deal.

Key elements of the proposed deal included:

• Data Security: Oracle would be responsible ⁣for hosting all U.S. TikTok ‍user ⁤data on Oracle’s cloud infrastructure, ensuring ‍it ⁣remained within the United⁢ States.
• Content Moderation: Oracle⁣ would review ⁢TikTok’s⁤ algorithms and content moderation policies to ensure they were not biased‍ or⁢ influenced by the Chinese government.
• Governance: TikTok Global would⁣ be governed by a board of‍ directors with U.S. citizens ⁢holding a majority of the seats.
• financial investment: ⁤Oracle and Walmart were expected to invest a combined $20 billion in TikTok⁢ Global.

The deal was presented ⁣as a win-win solution: it would allow TikTok to continue operating in the U.S. while addressing national security concerns and creating jobs.

Legal challenges and the Biden Administration’s Intervention

The proposed deal faced numerous legal ‍challenges from ⁢various parties, including⁣ TikTok⁤ itself. TikTok argued that‍ the Trump administration’s ⁢actions were arbitrary and capricious and violated its⁣ due process ⁣rights. Several lawsuits were filed⁤ in federal courts, seeking ⁣to block the implementation of the executive orders.

In February⁣ 2021, the Biden ⁤administration put‍ the deal on⁤ hold and initiated a broader review of TikTok and ⁣other foreign-owned apps posing national security risks. the administration revoked the Trump-era executive orders and directed the Department of Commerce to conduct a comprehensive review of security risks associated with apps controlled by foreign adversaries.

The Biden administration’s approach shifted from seeking a forced sale of TikTok to