TikTok picks Oracle over Microsoft in Trump-forced sales bid

File photo dated 27/12/19 showing the TikTok app on a smartphone. Twitter has expressed an interest in buying video platform
File photo dated 27/12/19 showing the TikTok app on a smartphone. Twitter has expressed an interest in buying video platform TikTok's US operations, it has been reported. The video-sharing app is already the subject of takeover discussions with Microsoft.

The Chinese owner of TikTok has picked Oracle to be its “trusted technology provider” in the US, the company has confirmed.

It beat rival Microsoft in a deal that could help keep the popular video-sharing app running in the country.

Oracle spokeswoman Deborah Hellinger confirmed remarks made by US Treasury Secretary Steven Mnuchin, who told CNBC on Monday that TikTok’s parent company, ByteDance, submitted its proposal to the US government for approval.

“We did get a proposal over the weekend that includes Oracle as the trusted technology partner with Oracle making many representations for national security issues,” Mr Mnuchin said.

He said there is also a commitment to make TikTok’s global operations a US-headquartered company with 20,000 new jobs.

Mr Mnuchin added: “We have a lot of confidence in both Microsoft and Oracle.

“They’ve chosen Oracle.”

Election 2020 Trump
Donald Trump has expressed concerns about the Chinese-owned TikTok being a threat to national security (Andrew Harnik/AP)

US President Donald Trump’s administration has threatened to ban TikTok by September 20 and ordered owner ByteDance to sell its US business, claiming national security risks due to its Chinese ownership.

TikTok denies it is a national security risk and is suing to stop the administration from enacting the threatened ban.

Much remains unclear about the proposed deal with Oracle, including whether it will only cover TikTok’s US business and, if so, how it will be split from the rest of TikTok’s social media platform, which is popular worldwide.

ByteDance also owns a similar video app, Douyin, for the Chinese market.

Any deal must still be reviewed by the Committee on Foreign Investment in the United States.

The president can approve or deny a transaction recommended by the panel, though Mr Trump has already voiced support for Oracle as a “great company” that could handle the acquisition.

TikTok
TikTok rejected Microsoft, despite the US company insisting it would have been an ideal candidate to take over its US operations (AP)

Microsoft said in a statement on Sunday that ByteDance “let us know today they would not be selling TikTok’s US operations to Microsoft”.

Proposals to acquire TikTok’s US business raised questions among outside observers about how it would be split from the rest of TikTok’s social media platform, which is popular worldwide.

ByteDance also owns a similar video app, Douyin, for the Chinese market.

Microsoft added it was “confident our proposal would have been good for TikTok’s users, while protecting national security interests”.

The company said it “would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation”.

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