Sanders: Trump Deal Gives Ellison Control of TikTok Algorithm – But Is It True?
▼ Summary
– Senator Bernie Sanders criticized the TikTok deal as crony capitalism, claiming it gives Oracle’s Larry Ellison control over the app’s algorithm and Paramount Skydance assets.
– However, Larry Ellison does not control the TikTok U.S. joint venture, as Oracle holds only a 15% stake and Ellison does not have a controlling stake in Oracle itself.
– The TikTok U.S. joint venture is majority-owned by American investors, with ByteDance retaining 19.9% ownership to comply with U.S. law, and its algorithm is licensed and managed separately in the U.S.
– Sanders incorrectly stated Ellison controls Simon & Schuster, which was sold to KKR, but Ellison does have full control over Paramount Skydance following its acquisition.
– Some U.S. TikTok users reported perceived censorship, which TikTok attributed to a technical outage, while the app is used by over 200 million individuals and 7.5 million businesses in the U.S.
A recent claim by Senator Bernie Sanders regarding control of TikTok’s influential algorithm has sparked significant discussion, though the factual details of the corporate structure tell a more complex story. In a social media post, Sanders criticized the arrangement stemming from the U.S. TikTok divestment law, asserting that Oracle co-founder Larry Ellison would gain control over the platform’s content-recommendation system. This statement, while capturing attention, appears to oversimplify the actual ownership and governance framework now in place.
The reality of the TikTok U.S. joint venture is defined by shared ownership and specific licensing agreements. Oracle holds a minority stake of 15% in the venture, with Ellison himself owning a large portion of Oracle’s shares but not a controlling interest in that company either. Oracle secures one seat on the seven-member board of the new entity, a position occupied by an executive vice president, not Ellison personally. The critical content algorithm is not owned by the U.S. venture but is licensed from ByteDance, which retains a 19.9% ownership stake. This American entity will manage a separate version of the algorithm, retrained on U.S. user data and hosted within Oracle’s domestic cloud infrastructure.
Senator Sanders’ commentary also extended to other media assets, suggesting Ellison controls publisher Simon & Schuster. This is inaccurate, as that company was sold by Paramount Global to the investment firm KKR last year. It is correct, however, that Larry Ellison exerts full control over Paramount Skydance, following the acquisition of Paramount Global by Skydance Media, which is led by his son, David Ellison. This deal received regulatory approval after commitments were made regarding corporate diversity programs and the appointment of an ombudsman.
Separate from the ownership debate, some TikTok users recently reported issues with video uploads, speculating about potential censorship of content critical of certain government agencies. TikTok clarified that these problems were due to technical difficulties from a power outage at a U.S. data center, not any form of content moderation. With over 200 million users and 7.5 million businesses on the platform in the United States, the operational stability and perceived neutrality of its algorithm remain subjects of intense public and political scrutiny.
(Source: Variety)
