TikTok-U.S. deal faces delays amid security concerns, report says

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Negotiations between TikTok and the U.S. authorities have been delayed as officers proceed to fret concerning the 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 issues embody how TikTok may share info associated to its video advice algorithm and the way a lot belief the federal government would finally must put in TikTok to observe by means of on the deal’s phrases, in line with the Journal. The federal government has but to return again with TikTok with new requests on methods to deal with the issues, the Journal reported based mostly on unnamed sources. TikTok confirmed it has not obtained an replace from the federal government about any unresolved issues.

“Whereas we will not touch upon the specifics of these confidential discussions, we’re assured that we’re on a path to completely fulfill all cheap U.S. nationwide safety issues and have already made important strides towards implementing these options,” a TikTok spokesperson mentioned in an announcement.

The 2 sides had reached broad agreements about storing U.S. person information on Oracle servers within the U.S., the Journal reported, shifting it from TikTok information facilities in Virginia and Singapore. Oracle would even be in command of overseeing protocols about which staff inside TikTok may entry U.S. person information, in line with the report.

U.S. officers and lawmakers have been vocal about their safety issues with TikTok. Republicans within the Home are broadly anticipated to make use of management of the chamber subsequent yr to zero in on fears concerning the app’s ties to China.

Federal Bureau of Investigation Director Christopher Wray advised lawmakers final month that he’s “extraordinarily involved” about TikTok’s U.S. operations. He mentioned the FBI’s suggestions “could be taken under consideration in any agreements made to handle the difficulty.”

In notes on Wednesday, analysts predicted that Meta, Google’s YouTube and Snap would stand to realize from a TikTok ban within the U.S.

Financial institution of America analysts mentioned a TikTok ban is a “doable however not almost certainly situation,” including {that a} “negotiated sale to a US tech or media firm could possibly be extra probably if a ban was on the horizon, and a sale may speed up advertiser curiosity.”

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

Cowen analysts wrote Wednesday that Meta’s Reels, short-form movies just like these on TikTok, “could be the most important beneficiary” of a TikTok ban, adopted by YouTube’s Shorts.

“If TikTok had been banned, 26% of its customers would reallocate their time spent to IG Reels, 21% to YouTubeShorts & 3% to SNAP’s Highlight,” Cowen estimated based mostly on its November survey.

Nonetheless, Cowen analysts agreed a full ban will not be the almost certainly situation.

“We proceed to consider TikTok will survive within the US,” Cowen coverage analyst Paul Gallant wrote. “However we expect it is now a really shut name, and we keep our 40% probability of a ban in 2023.”

“The query now could be whether or not CFIUS is pausing to find out what else is required for a robust settlement, so it may be efficiently bought to Capitol Hill,” he added. “Or whether or not CFIUS is reassessing a monitoring settlement altogether in favor of mandating that Bytedance divest TikTok,” referring to the Treasury Division’s Committee on Overseas Funding within the U.S., which is main negotiations.