In early August, President Trump signed an executive order giving TikTok’s parent company a dramatic ultimatum: sell its operation in the United States to an American firm in the next forty-five days, or risk being banned.
Last week, just before the forty-five-day deadline expired, TikTok’s Beijing-based owners, ByteDance, agreed to move forward with a bid from Oracle and Walmart. Except the forced sale wasn’t a sale at all. Instead, Oracle, Walmart, and TikTok agreed to set up a new US-based company that would oversee the video-sharing app’s operation in the United States. Under the deal, Oracle and Walmart would have a combined 20 percent stake in the new entity, called TikTok Global, while ByteDance would hold the remaining 80 percent.
While ByteDance okayed the Oracle-Walmart bid, Trump sounded the alarm bells, declaring last week that he would issue an order for Google and Apple to pull the app. Trump’s strong stance against China made headlines around the world: TikTok is now one of the largest video apps on the planet, with a hundred million US users alone. Now well past the original forty-five-day deadline, TikTok is still unbanned, the company remains in the hands of its original Chinese owners, and Trump is seemingly getting nothing he asked for.
So what gives? For Trump, these bombastic executive orders serve one underlying purpose: to demonstrate his toughness on China, a reelection strategy he’s been using since the pandemic hit. That is why Trump and his administration of China hawks have repeatedly cited protecting national security as the reason for the ban.
But now that Trump has agreed to the new arrangement, the details — none of which ostensibly satisfied his demands — are almost beside the point. What matters is that he can drum up Sinophobia and xenophobia. (It’s also possible the White House was swayed by Oracle founder Larry Ellison, who is a major fundraiser for Trump’s reelection campaign.)
Meanwhile, TikTok is doing what it can to avoid restrictions on its data practices. Microsoft, the first company to make a bid for TikTok after Trump’s executive order, said it “would have made significant changes to ensure [that TikTok] met the highest standards for security, privacy, online safety, and combating disinformation.” To ByteDance, the Beijing-based owners of TikTok, this level of intrusion was unacceptable: it would mean exposing the inner workings of TikTok’s powerful algorithm, which also fuels China’s domestic version of TikTok (Douyin), to the US government.
But perhaps the most objectionable aspect of Microsoft’s bid to ByteDance was that the Chinese government would no longer be in control of TikTok’s ability to censor political content. Over the past year, TikTok has censored posts about the Hong Kong protests, erasing any hint of unrest in the city. ByteDance has also instructed its moderators to block content that mentions the Tiananmen Square massacre, Tibetan independence, or the banned religious group Falun Gong.
It’s unclear whether the Oracle-Walmart arrangement would mitigate any of this or guarantee any tangible measures to protect users’ data. So far, Oracle’s proposal to fix data security issues is wishy-washy at best. Beyond moving TikTok’s hosting from Google’s cloud services to Oracle’s, which in itself means nothing, TikTok has agreed to let Oracle engineers audit their app’s codebase. While this opens more possibilities for exposing potential loopholes or security concerns in TikTok, Oracle would have no incentive to do so once the deal is sealed. Like virtually every other major tech company, Oracle is also a purveyor of surveillance capitalism and in the business of selling user data.
With the new Oracle-Walmart arrangement, tech capital between the United States and China will become ever more entwined. Any profit that TikTok makes from unfair, deceptive, or abusive data practices will also benefit Oracle and Walmart shareholders. If Trump’s goals were really to address digital security concerns, we would instead be seeing stronger security laws that would be applied to all companies operating in the United States.
But at the end of the day, Trump is getting exactly what he wants: forcing TikTok to pay a hefty fee for operating in the United States while sidestepping any real data concerns that the app poses. And he’s fanning the flames of nationalism ahead of November’s election.