Oracle Corp. will get full access to review TikTok’s source code and updates to make sure there are no back doors used by the company’s Chinese parent to gather data on the video-sharing app’s 100 million American users, according to people familiar with the matter.
TikTok parent ByteDance Ltd. and Oracle submitted these details in their proposal to the Trump administration with a goal of averting an outright sale of the app or a shutdown of its U.S. operations set to take effect Sept. 20. U.S. President Donald Trump has threatened to ban the app in a pair of executive orders issued last month based on U.S. national security concerns.
The terms of the agreement seem to fall short of meeting those national security concerns expressed by administration officials including Secretary of State Mike Pompeo, according to people familiar with the matter. Pompeo, Attorney General William Barr and other members of the administration have been talking directly with Oracle executives, one person said.
Beijing is less likely to oppose the current deal since it doesn’t involve the transfer of ByteDance’s algorithms, which recently enacted export restrictions specifically encompass, a person close to the negotiations said. But Trump, speaking Wednesday with reporters, said he is getting a briefing on the issue Thursday morning, adding that he didn’t like the idea of ByteDance retaining control of TikTok.
“Just conceptually, I can tell you I don’t like that,” he said after a reporter told him that ByteDance would retain a majority of the company’s assets, with Oracle acquiring a minority stake.
“I’m not prepared to sign off of anything,” Trump said. “I have to see the deal.”