National security concerns reportedly delay TikTok-U.S. deal

2 years ago 93

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Negotiations betwixt TikTok and the U.S. authorities person been delayed arsenic officials proceed to interest astir the imaginable nationalist information issues the app could airs fixed its ownership by Chinese institution ByteDance, The Wall Street Journal reported connected Tuesday.

The government's concerns see however TikTok could stock accusation related to its video proposal algorithm and however overmuch spot the authorities would yet request to enactment successful TikTok to travel done connected the deal's terms, according to the Journal. The authorities has yet to travel backmost with TikTok with caller requests connected however to code the concerns, the Journal reported based connected unnamed sources. TikTok confirmed it has not received an update from the authorities astir immoderate unresolved concerns.

"While we can't remark connected the specifics of those confidential discussions, we are assured that we are connected a way to afloat fulfill each tenable U.S. nationalist information concerns and person already made important strides toward implementing those solutions," a TikTok spokesperson said successful a statement.

The 2 sides had reached wide agreements astir storing U.S. idiosyncratic information connected Oracle servers successful the U.S., the Journal reported, moving it from TikTok information centers successful Virginia and Singapore. Oracle would besides beryllium successful complaint of overseeing protocols astir which employees wrong TikTok could entree U.S. idiosyncratic data, according to the report.

U.S. officials and lawmakers person been vocal astir their information concerns with TikTok. Republicans successful the House are wide expected to usage power of the enclosure adjacent twelvemonth to zero successful connected fears astir the app's ties to China.

Federal Bureau of Investigation Director Christopher Wray told lawmakers past month that helium is "extremely concerned" astir TikTok's U.S. operations. He said the FBI's feedback "would beryllium taken into relationship successful immoderate agreements made to code the issue."

In notes connected Wednesday, analysts predicted that Meta, Google's YouTube and Snap would basal to summation from a TikTok prohibition successful the U.S.

Bank of America analysts said a TikTok prohibition is simply a "possible but not astir apt scenario," adding that a "negotiated merchantability to a US tech oregon media institution could beryllium much apt if a prohibition was connected the horizon, and a merchantability could accelerate advertiser interest."

"In a prohibition scenario, we would presumption Snap arsenic the biggest sentiment beneficiary, followed by Meta," the analysts wrote.

Cowen analysts wrote Wednesday that Meta's Reels, short-form videos akin to those connected TikTok, "would beryllium the biggest beneficiary" of a TikTok ban, followed by YouTube's Shorts.

"If TikTok were banned, 26% of its users would reallocate their clip spent to IG Reels, 21% to YouTube
Shorts & 3% to SNAP's Spotlight," Cowen estimated based connected its November survey.

Still, Cowen analysts agreed a afloat prohibition is not the astir apt scenario.

"We proceed to judge TikTok volition past successful the US," Cowen argumentation expert Paul Gallant wrote. "But we deliberation it's present a precise adjacent call, and we support our 40% accidental of a prohibition successful 2023."

"The question present is whether CFIUS is pausing to find what other is needed for a beardown settlement, truthful it tin beryllium successfully sold to Capitol Hill," helium added. "Or whether CFIUS is reassessing a monitoring statement altogether successful favour of mandating that Bytedance divest TikTok," referring to the Treasury Department's Committee connected Foreign Investment successful the U.S., which is starring negotiations.