The Trump Administration’s New Agreement: A Closer Look
Introduction
After years of diplomatic disputes, bureaucratic maneuvers, and attempts by federal and state governments to restrict the platform, U.S. President Donald Trump has signed an executive order making TikTok “American-owned.” However, this agreement may not be as definitive as it seems and could inadvertently strengthen China’s influence.
The Agreement: A Closer Look
- Oracle and U.S. Investors to Control 80%: Oracle and a consortium of U.S. investors will control 80% of a new U.S.-based entity managing TikTok’s operations in the U.S., with all user data remaining on Oracle servers in Texas.
- Data Security and Algorithm Control: The agreement appears to place U.S. control over user data and TikTok’s servers, along with a licensed version of its recommendation algorithms, under U.S. jurisdiction.
- ByteDance Retains Significant Influence: Despite the 80% U.S. ownership, ByteDance retains approximately 20% and continues to own the intellectual property of TikTok’s algorithms. The licensed algorithm version still depends on China for periodic updates.
Challenges and Concerns
The agreement’s benefits are overshadowed by concerns about algorithm effectiveness and data access. Oracle, lacking global data access, cannot fully leverage ByteDance’s powerful algorithms. China can restrict or impose conditions on technology transfer under its export control regime, turning TikTok into a diplomatic tool.
Implications for the U.S.
This agreement shifts, rather than severes, Chinese influence. While ByteDance no longer oversees daily content recommendations, Oracle takes that role, easing immediate U.S. security concerns. However, China retains residual control over TikTok’s algorithms, potentially solidifying its influence.
Conclusion
The agreement may alleviate fears of Chinese access to U.S. data or direct algorithm manipulation, replacing them with a more subtle and enduring risk: China’s technological leverage over TikTok. The Trump administration has merely swapped one vulnerability for another.
Key Questions and Answers
- Q: How does this agreement affect U.S. data security?
A: The agreement places user data on U.S. servers, but Oracle lacks global data access, limiting its ability to leverage ByteDance’s powerful algorithms fully.
- Q: Can China still exert influence over TikTok?
A: Yes, China can restrict or impose conditions on technology transfer under its export control regime, turning TikTok into a diplomatic tool.
- Q: What does this mean for a potential less competitive TikTok in the U.S.?
A: A less competitive TikTok could be less addictive for U.S. teenagers, which might not be entirely negative.
Author: Angela Huyue Zhang, Professor of Law at the University of Southern California. She is the author of “High Wire: How China Regulates Big Tech and Governs Its Economy” (Oxford University Press, 2024) and “Chinese Antitrust Exceptionalism: How the Rise of China Challenges Global Regulation” (Oxford University Press, 2021).
Copyright: Project Syndicate, 1995 – 2025
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