Congress Questions if TikTok Deal Follows Its Own Law
▼ Summary
– TikTok has formed a new U.S. joint venture with ByteDance holding a minority 19.9% stake, while Oracle and investment firms own the rest, with Oracle handling U.S. data storage.
– Key lawmakers from both parties express confusion and concern, questioning whether the deal truly severs Chinese influence over the algorithm and secures American user data.
– The deal’s sparse details leave major questions unanswered, such as the nature of the algorithm licensing agreement and its compliance with the original divest-or-ban law.
– Critics, including Senator Markey, accuse the White House of a damaging lack of transparency regarding the agreement’s specifics and national security implications.
– Some Democrats are frustrated that the arrangement appears to financially benefit allies of former President Trump while potentially failing to address the core national security threat.
The recent restructuring of TikTok’s U.S. operations has left key lawmakers questioning whether the arrangement genuinely complies with the legislation designed to force its sale or ban. TikTok announced the formation of a new U.S. data security joint venture, with Oracle and several investment firms holding an 80.1 percent stake, leaving parent company ByteDance with a minority share. While the company states this new entity will control U.S. data storage and content moderation, the lack of detailed public information has sparked bipartisan concern in Congress about ongoing Chinese influence and data security.
Critical questions remain unanswered from when the deal framework was first proposed. The central issue is whether the licensing agreement for TikTok’s core algorithm can legally sever the prohibited operational ties with ByteDance. House Select Committee on China Chair John Moolenaar highlighted this uncertainty, demanding clear assurances that China holds no sway over the algorithm and that American user data is truly secure. His committee now faces the task of conducting oversight on an agreement with few visible details.
Reactions from other legislators reflect a spectrum of frustration and skepticism. Representative Ro Khanna, who opposed the original bill, warned that the deal creates fresh uncertainty for the vast community of content creators who depend on the platform for their income. He emphasized the need to protect the creator economy while still addressing data security, a complex balancing act. Senator Ed Markey, who initially voted for the legislation that forced this outcome, stated plainly that the announced deal raises more questions than it resolves, criticizing the administration’s opaque handling of the process.
The political dimensions of the agreement have further fueled the controversy. Some Democratic lawmakers point out that Trump allies like Oracle’s Larry Ellison are positioned to benefit financially, framing the deal as one that enriches the former president’s associates. Energy and Commerce Committee Ranking Member Frank Pallone argued the sparse details fail to prove compliance with the law or eliminate the national security threat from Beijing’s potential continued control. This perception underscores a deep-seated concern that the arrangement may prioritize political and business interests over stringent national security safeguards.
With the White House and TikTok offering little additional commentary, the burden now falls on Congress to scrutinize the joint venture. Lawmakers from both parties acknowledge a responsibility to investigate, demand full transparency, and verify that the final structure unequivocally protects national security without unnecessarily disrupting the service for millions of American users. The path forward requires rigorous oversight to determine if this corporate restructuring is a genuine solution or merely a legal facade.
(Source: The Verge)
