TikTok USA: Official approvals for sale reportedly complete
After a long and hard-fought battle, the closing is now in sight: TikTok USA is getting new owners.
(Image: Luiza Kamalova/Shutterstock.com)
A week before Christmas, TikTok signed the imposed contract for the sale of the majority stake in its US subsidiary. The closing, i.e., the implementation of the sale, was supposed to take place by Thursday. Otherwise, a ban on operations in the USA could theoretically be reimposed. But it should all work out.
Because according to Semafor, the responsible competition authorities in both the People's Republic of China and the United States of America have approved the sale. Official confirmations are still pending. Approximately half of the US population uses TikTok.
Through the sale, the Chinese video platform avoids a ban in the USA. A law passed in 2024 aims for the forced sale of the US subsidiary TikTok. Officially, the goal is to prevent US citizens' data from being accessed by the Chinese government and to place the TikTok recommendation algorithm under US control. Economically, it's about the profit.
Complex Setup
The new structure is currently opaque. According to the White House, the new TikTok joint venture will be responsible for data protection for US users, censorship, and the security of the algorithm and software. The recommendation algorithm is to be retrained based on US user data.
The IT group Oracle, the investment company Silver Lake, and the Abu Dhabi-based investment fund MGX will jointly hold 45 percent of TikTok USA. Bytedance retains just under 20 percent of the shares. The rest goes to previous Bytedance investors. It is also known that at least four US citizens will sit on the seven-member board of directors of the US subsidiary, named TikTok USDS Joint Venture LLC, who must be confirmed by the US government ("national security clearance").
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However, Bytedance has likely secured a portion of the revenue from advertising and online retail. For this, as well as to maintain compatibility with TikTok in the rest of the world, Bytedance will continue to have its own subsidiaries in the USA.
Oracle, in turn, takes on the lucrative task of hosting TikTok's US user data in a specially created cloud. Furthermore, Oracle is to "monitor" changes to the algorithm and updates to the TikTok app. Oracle CEO Larry Ellison is a generous supporter of Donald Trump.
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