TikTok signs Trump-backed deal to avoid US ban

TikTok has reached a deal to form a joint venture that will allow it to continue operating in the US, five years after Donald Trump threatened to ban the social media platform over privacy and national security concerns, a move that further strained relations with China.ByteDance, TikTok’s Chinese owner, has signed a deal with Larry Ellison’s Oracle, the private-equity group Silver Lake and Abu Dhabi’s MGX that will allow it to retain control of its core US operations.Under the arrangement, the joint venture will take over part of TikTok’s US business, including data protection, algorithm security and content moderation.However, TikTok’s chief executive, Shou Zi Chew, told employees in a memo that ByteDance would continue to run US operations, including its main revenue drivers such as e-commerce, advertising and marketing.The deal ends five years of uncertainty over the future of TikTok in the US, where the platform has more than 130 million users.In 2020, during his first term as president, Trump issued an executive order threatening to ban the service to “safeguard the national security of the United States”.The US, which ordered ByteDance to sell TikTok’s US business, accused the platform of acting as a vehicle for the Chinese government to harvest data from American users. The company has consistently denied the allegations.During Joe Biden’s administration, Congress passed legislation prohibiting ByteDance from retaining operational ties with TikTok US. However, the national security law gave the US president the power to decide whether any deal met its requirements.Trump has approved the joint venture that will control TikTok’s US business.Under the new structure Oracle, Silver Lake and MGX will each control 15%. Existing ByteDance investors will take 30.1%, while ByteDance will own 19.9% – the maximum permitted under US foreign ownership laws. The remaining 5% will be held by as-yet-unnamed new investors.The US joint venture will be overseen by a seven-member board of directors, the majority of whom will be American, according to Chew’s staff memo.“Upon the closing, the US joint venture, built on the foundation of the current TikTok US Data Security (USDS) organisation, will operate as an independent entity with authority over US data protection, algorithm security, content moderation and software assurance,” he added.In September, the Trump administration said a framework agreement had been reached after a breakthrough in negotiations between US and Chinese officials.JD Vance, the US vice-president, said at the time that the deal would value TikTok’s US joint venture at $14bn.Under the arrangement, Oracle will oversee the algorithm that recommends videos in US users. The system will be retrained using US data to “ensure the content feed is free from outside manipulation”, Chew’s memo states.China will retain control of the algorithm, with the country’s cybersecurity regulator previously saying it had agreed that any TikTok US deal would include “licensing … and other intellectual property rights”.Quick GuideContact us about this storyShowThe best public interest journalism relies on first-hand accounts from people in the know.If you have something to share on this subject, you can contact us confidentially using the following methods.Secure Messaging in the Guardian appThe Guardian app has a tool to send tips about stories. Messages are end to end encrypted and concealed within the routine activity that every Guardian mobile app performs. This prevents an observer from knowing that you are communicating with us at all, let alone what is being said.If you don't already have the Guardian app, download it (iOS/Android) and go to the menu. Select ‘Secure Messaging’. SecureDrop, instant messengers, email, telephone and postIf you can safely use the Tor network without being observed or monitored, you can send messages and documents to the Guardian via our SecureDrop platform.Finally, our guide at theguardian.com/tips lists several ways to contact us securely, and discusses the pros and cons of each. Illustration: Guardian Design / Rich CousinsThe deal is expected to close on 22 January, the day before a deadline set by Trump that would otherwise have resulted in the app being banned in the US.Ellison’s role in the new ownership of the most popular social media platform in the US has raised concerns about the decreasing share of media firms not controlled by pro-Trump billionaires.Ellison’s son David is driving sweeping changes at CBS; Mark Zuckerberg controls Instagram and Facebook; and Jeff Bezos owns the Washington Post. X is controlled by Elon Musk, who was briefly aligned with Trump this year before a public feud.“First Paramount/CBS and now TikTok,” Elizabeth Warren, a Democratic senator from Massachusetts, wrote on Bluesky in response to the news. “Trump wants to hand over even more control of what you watch to his billionaire buddies.“Americans deserve to know if the president struck another backdoor deal for this billionaire takeover of TikTok.”