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What happened?
TikTok executives have completed a deal creating a separate U.S.-based entity to control the social media platform’s American operations. The newly formed TikTok USDS Joint Venture LLC is majority owned by U.S. investors and governed by a seven-member board, with ByteDance, the current China-based owner, retaining a 19.9% stake. The ownership structure includes investments of 15% by Oracle, Silver Lake, and Abu Dhabi’s MGX respectively. Oracle will also provide cloud services. Binding agreements were signed in December, and finalization of the deal was announced on January 23. The transaction ends over a 5-year legal and political dispute that began during U.S. President Donald Trump’s first term.
What is the broader picture?
U.S. scrutiny of TikTok began in 2019, when two members of the Senate Intelligence Committee asked for a security review on implications of the app’s U.S. operations. Lawmakers focused primarily on the data TikTok collected from American users and the possibility that such data could be accessed by Chinese authorities through ByteDance, TikTok’s parent company, which is based in China.
The concerns quickly moved beyond Congress. In December 2019, the U.S. Army and Navy instructed personnel to delete TikTok from all government-issued devices, citing security risks. The issue reached the White House the following year. In August 2020, then-president Donald Trump issued an executive order requiring ByteDance to sell TikTok’s U.S. operations to a government-approved buyer or face a nationwide ban. The order cited not only data-security risks but also concerns that the platform could be used to suppress politically sensitive content or facilitate the spread of disinformation in line with the interests of the Chinese Communist Party.
Several potential buyers, including Walmart and Microsoft, entered talks with ByteDance, but no sale was completed. Instead, ByteDance proposed a partnership with Oracle, under which the U.S. Silicon Valley company would serve as a “trusted technology provider” and host American user data on its cloud infrastructure. The arrangement was presented as a compromise intended to address Washington’s security concerns without a forced divestment.
The arrangement was never fully tested. Before its effectiveness could be evaluated, the change of administration in the U.S. in January 2021 brought an abrupt shift in policy. President Joe Biden revoked Trump’s executive order, removing the immediate threat of a ban on TikTok. At the same time, his administration continued investigations into whether TikTok posed an ongoing national security risk.
Later findings, however, showed that, despite the Oracle partnership, ByteDance engineers in China retained access to sensitive U.S. user data. Separate reports described instances of targeted surveillance of specific users, including journalists, and the collection of data related to users’ consumption of LGBTQ+ content.
Those findings fed into a renewed legislative push. As the investigations continued, TikTok representatives said the company would move U.S. user data off shared Oracle infrastructure and build its own data centers under a plan known as Project Texas. The proposal failed to persuade lawmakers that security concerns would be resolved.
In April 2024, Biden signed an act requiring ByteDance to sell TikTok to a U.S.-approved buyer within nine months or face a nationwide ban. In the final weeks before the bill’s passage, TikTok launched an aggressive campaign, urging users through app pop-ups to contact their representatives to express opposition to the measure.
The divestment deadline expired on January 19, 2025, one day before Trump’s second inauguration. TikTok temporarily shut down its U.S. operations that day, displaying a message to users apologizing for the disruption while expressing hope for a resolution from Trump. Service was restored hours later after the new president signaled his intention to delay enforcement of the ban. Since then, the deadline has been extended four times, until the current finalization.
Why does it matter
The TikTok sell-off was presented as a solution to long-standing concerns over sensitive U.S. user data potentially flowing to China. With Oracle emerging as the majority stakeholder in the new entity, however, fundamental questions remain unresolved. This was not the first time Oracle was tasked with reassuring the American public about the security of their TikTok data. The company had already been deeply involved in TikTok’s U.S. infrastructure under previous arrangements, while failing to keep American user data safe. Based on this, the logic of treating Oracle as a definitive safeguard appears, at best, inconsistent.
Attention has also focused on Oracle’s leadership. Larry Ellison, the company’s chairman — and now the fourth richest person on the planet — currently sits at the apex of a rapidly expanding media empire. Through the TikTok acquisition and the separate takeover of Paramount led by his son David Ellison, the Ellison family has gained control over a substantial segment of the U.S. information space. The result is worrisome vertical and horizontal media concentration.
Only days after the change in ownership, fresh concerns have emerged over content moderation on the U.S. version of TikTok. Updated terms of service have drawn criticism for significantly expanding the platform’s ability to collect precise user location data.
Separate claims have started circulating about possible content suppression related to politically sensitive topics for the Trump administration, including references to the Epstein files or protests in Minneapolis. Users reported difficulties uploading videos containing certain keywords. There were also reports of videos attracting unusually low view counts… It is important to note, however, that researchers at political science and analysis website Good Authority have not been able to verify these claims. Their inability to do so was explained partially by scarcity of reliable data access to researchers. Oracle has denied allegations of censorship, attributing irregularities to technical issues such as power outages.
The issue has also drawn attention in Europe, with users there reporting similar experiences. Members of the European Parliament have formally asked the European Commission, which is responsible for enforcing the Digital Services Act, to conduct an independent assessment of TikTok’s compliance.
Limited access for independent researchers has been a persistent feature of TikTok’s operations for years, and the change in ownership has not altered that reality. These challenges have been discussed in our EVC-produced Zone of Influence podcast with data analyst Josef Šlerka.
Taken together, the episode underscores the view that TikTok remains a questionable platform on which to entrust sensitive user data, even after changes in ownership. The opacity of the TikTok acquisition process may serve as a cautionary example, but it does not weaken the rationale for further European regulatory engagement.