More information is slowly emerging about the big deal to allow TikTok to continue operating in the US, with Larry Ellison’s Oracle set to exert more control over how people experience content on the platform.
Given Ellison’s son also recently completed a deal giving him control over TV networks CBS and MTV, by buying media and entertainment company Paramount Global, the Trump supporting family are becoming significant media moguls alongside their tech interests.
Additional details about the incoming changes at TikTok US are mainly coming out of the White House at the moment. Current owner, China-based ByteDance, and the Chinese government, which has to sign off on any deal, have been much less committal in their statements.
Nevertheless, Donald Trump and his team seem confident that Beijing will ultimately approve the change in ownership and control of TikTok US. And that that transaction will satisfy the sell-or-be-banned law passed by US Congress last year over concerns that the Chinese government has access to TikTok user-data via its current owner.
Trump said on social media on Friday that a call with Chinese President Xi Jinping was “very productive” and that progress had been made on “approval of the TikTok deal”. He then added, “the call was a very good one, we will be speaking again by phone, appreciate the TikTok approval”.
Although various American investors are involved in the deal to buy TikTok US from ByteDance, it is known that Oracle – led by staunch Trump ally Larry Ellison – will play a key role, as both an investor and technical partner.
Oracle already stores US TikTok user data, having had a relationship with the short form video app ever since Trump tried to ban it during his first Presidency. But the tech company’s technical role will increase as a result of this deal.
According to the Guardian, White House officials have indicated that moving forward Oracle will also control the all important TikTok algorithm within the US.
It will reportedly license the algorithm from ByteDance and then retrain it using US user data. Quite what that means and how it will impact on user experience remains unclear, but it could give Oracle quite a bit of control over how American users discover content on the platform in the future.
Team Trump seems confident that these measures will allay all the concerns previously expressed by Congress members regarding data security on TikTok, meaning the app can continue legally operating in the US. Which will be a relief to the artists, creators and record labels that rely on TikTok as a crucial marketing and fan engagement platform.
Though some media commentators are starting to note that – while the Chinese government will be one step further removed from US TikTok following this deal – the transaction will very much boost the influence of the Trump supporting Ellison family within the US content and media market.
And the family already has significant influence following the recent merger of Skydance Media – founded and run by Ellison’s son David – with Paramount Global.
Skydance has backing from equity outfit KKR and sold a “minority non-voting stake” – believed to be between 5% and 10% – to Chinese company Tencent Holdings in 2018 for around $100 million. Although Tencent’s stake in the combined Paramount Skydance is believed to be less than 5%, concerns have been expressed about a Chinese company being involved in a US media giant.
Meanwhile, Ellison Junior is now Chairman and CEO of Paramount Skydance. Add control of TikTok to that and the Ellisons are amassing quite the media empire. Although control of TikTok will be restricted to an extent by the other investors, with TikTok US set to be owned by a consortium of billionaires and investment funds, alongside ByteDance which will retain a 20% stake.
That group of investors could include another father/son team, Trump revealed in an interview this weekend, with Rupert Murdoch and his son Lachlan potentially involved – despite Trump launching a $10 billion libel lawsuit against Murdoch’s Wall Street Journal.
I’m sure everyone will be pleased to know that we’ll be relying on the Murdochs to ensure that the Ellisons don’t abuse their influence over the TikTok algorithm.
As more information about the TikTok deal slowly drips out, we could have a much more detailed picture of the app’s future in the US very soon. Despite ByteDance and China still being much less forthcoming with statements confirming the deal around TikTok US, it’s thought Trump may formalise the plan via one of those executive orders as soon as this week.
