TikTok’s sale to Oracle now in limbo pending Biden review

TikTok was facing a ban in the U.S. under the Trump administration, but that may no longer happen.

What you need to know

• Oracle agreed to purchase the social media app, TikTok, last year.
• Oracle teamed up with Walmart to purchase TikTok’s U.S. operations after an ultimatum by the Trump administration ordered the company to sell or be banned.
• The sale has now been indefinitely postponed as the new administration takes a closer look at the security risks posed by Chinese software.

TikTok’s impending purchase by Oracle has been put on indefinite hold after the Biden administration launched a review into security risks from Chinese apps and software targeted by the previous administration, The Wall Street Journal reported

The app had come under scrutiny by the Trump administration towards the end of the year over vague security risks. Owner Bytedance was ordered to sell off TikTok’s U.S. operations to a U.S. company or face a ban. Even after Oracle beat out prolific suitors including Microsoft to strike a deal, enforcing the ban was tricky as TikTok filed successful legal challenge after legal challenge. With the Trump administration later losing interest in enforcing its own ban following the November 2020 presidential elections, the new administration throws an additional spanner in the works.

National Security Council spokeswoman Emily Horne told the Wall Street Journal in a statement:

We plan to develop a comprehensive approach to securing U.S. data that addresses the full range of threats we face. This includes the risk posed by Chinese apps and other software that operate in the U.S. In the coming months, we expect to review specific cases in light of a comprehensive understanding of the risks we face.

Alongside Huawei and WeChat, TikTok was one of the Chinese firms targeted by the Trump administration over security concerns. To be clear, while TikTok did have some security issues, and it has been banned by non-U.S. governments in the past, it has never been a demonstrable national security risk. The broad consensus in 2020 was that TikTok was not a security threat, and though the company had taken steps to Americanize itself — those were not enough to insulate itself from allegations of being a tool of the Chinese Communist Party, or CCP.