TikTok Closes in on Oracle Deal to Allay U.S. Data Concerns

The deal would come a year and a half after a US national security body ordered ByteDance to divest TikTok.

The deal would come a year and a half after a US national security body ordered ByteDance to divest TikTok.

TikTok is nearing a deal for Oracle Corp to store its US users’ information without Chinese parent company ByteDance having access to it, hoping to allay US regulators’ concerns about data integrity in the popular short-video app, said people familiar with the matter.

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The deal would come a year and a half after a US national security body ordered ByteDance to divest TikTok amid fears that US user data could be leaked to the Chinese communist government.

That order was not enforced after Joe Biden succeeded Donald Trump as US President last year. However, the body known as the Committee on Foreign Investment in the United States (CFIUS) has continued to raise concerns about data security at TikTok, which ByteDance now hopes to address, the sources said.

It’s not clear if CFIUS will determine that TikTok’s partnership with Oracle will resolve identified national security issues, the sources said. A spokesman for the US Treasury Department, which chairs the CFIUS, did not immediately respond to a request for comment.

Oracle had been talking about acquiring a minority stake in TikTok in 2020 when ByteDance was under US pressure to sell the app. The cloud computing giant will store all of TikTok’s US user data on Oracle data servers as part of the new proposed partnership, the sources said. Some of TikTok’s data is currently stored in Alphabet Inc.’s Google Cloud.

According to the sources, as part of the agreement, a dedicated US data stewardship team of hundreds of people will be established to act as gatekeepers for US user information and shield it from ByteDance. The team will consist of engineers and cybersecurity personnel. The companies are discussing a structure in which this team would operate autonomously and not be under TikTok’s control or oversight, the sources added.

TikTok is also exploring partnerships with other tech companies over firewalls and cyber security measures, the sources added.

A TikTok spokesperson declined to comment on the partnership with Oracle. “We continue to invest in data security as part of our overall work to keep our users and their information safe,” the spokesperson wrote in an email.

Oracle did not immediately respond to requests for comment.

TikTok is one of the world’s most popular social media apps with more than 1 billion active users worldwide. US users’ information is currently stored in TikTok data centers in Virginia, with a backup in Singapore.

The United States is increasingly screening app developers for the personal data they process, particularly when some of it pertains to US military or intelligence officials.

Chinese gambling company Beijing Kunlun Tech Co Ltd was forced to sell its popular gay dating app Grindr in 2020 after CFIUS approached them with national security concerns.

ByteDance is one of the fastest growing startups in China. It owns the country’s leading news aggregator, Jinri Toutiao, as well as TikTok’s Chinese counterpart, Douyin.

The US Department of Commerce is considering new rules to address potential security risks of TikTok and other foreign-owned apps, and possibly even banning some of them. If adopted, the rules could force TikTok to undergo third-party testing, source code testing and monitoring of user data logs.

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