TikTok-US deal faces delays as a consequence of safety considerations, report says

Negotiations between TikTok and the US authorities have been delayed as officers proceed to fret about potential nationwide safety points the app may pose given its possession by Chinese language firm ByteDance, The Wall Avenue Journal reported on Tuesday. .

The federal government’s considerations embrace how TikTok would possibly share data associated to its video advice algorithm and whether or not the federal government ought to finally belief TikTok to satisfy the phrases of the deal, in accordance with the Journal. The federal government has but to come back again to TikTok with additional calls for on methods to tackle the considerations, the Journal reported primarily based on unnamed sources. TikTok confirmed that it had not acquired an replace from the federal government relating to the unresolved points.

“Whereas we can’t touch upon the main points of those confidential discussions, we’re assured that we’re on observe to completely fulfill all affordable nationwide safety considerations of the US and have already made vital progress towards implementing these options,” a TikTok spokesperson stated in a press release.

The 2 events had reached a broad settlement on the storage of US consumer knowledge on Oracle servers in the US, the Journal reported, shifting it from TikTok knowledge facilities in Virginia and Singapore. Oracle would even be answerable for overseeing the protocols over which TikTok staff may entry US consumer knowledge, in accordance with the report.

US officers and lawmakers have raised safety considerations with TikTok. Home Republicans are anticipated to make use of the chamber scrutiny subsequent yr to concentrate on fears over the app’s ties to China.

Federal Bureau of Investigation Director Christopher Wray advised lawmakers final month that he was “extraordinarily involved” about TikTok’s U.S. operations. He stated the FBI’s feedback “can be factored into any settlement reached to resolve the difficulty.”

In notes on Wednesday, analysts predicted that Meta, from google Youtube and Instantaneous would have all the pieces to achieve from a TikTok ban in the US

Financial institution of America analysts stated a ban on TikTok is a “attainable however not the almost certainly situation,” including {that a} “negotiated sale to a U.S. tech or media firm is perhaps extra seemingly if a ban was on the horizon, and a sale may speed up advertiser curiosity.”

“In a ban situation, we’d see Snap as the most important sentiment beneficiary, adopted by Meta,” the analysts wrote.

Cowen analysts wrote Wednesday that Meta’s Reels, shortened movies much like these on TikTok, “can be the most important beneficiary” of a TikTok ban, adopted by YouTube’s Shorts.

“If TikTok have been banned, 26% of its customers would reallocate their time spent to IG Reels, 21% to YouTube
Shorts and three% to SNAP’s Highlight,” Cowen estimated primarily based on his November survey.

Nonetheless, Cowen analysts agreed {that a} complete ban is just not the almost certainly situation.

“We proceed to consider that TikTok will survive in the US,” Cowen political analyst Paul Gallant wrote. “However we consider it’s now very shut, and we preserve our 40% likelihood of a ban in 2023.”

“The query now could be whether or not CFIUS stops to find out what is required for a powerful settlement, in order that it may be bought efficiently on Capitol Hill,” he added. “Or if CFIUS utterly re-evaluates a supervisory settlement in favor of forcing Bytedance to divest TikTok,” referring to the Treasury Division’s Committee on Overseas Funding in the US, which is main the negotiations.

The Treasury Division didn’t instantly reply to a request for remark.

Learn the complete report at The Wall Avenue Journal.

CNBC’s Michael Bloom contributed to this report.

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