In August 2020, President Donald Trump dropped a bombshell supreme command Banning TikTok in the US. Since then, TikTok has been competing with other big tech companies and growing among youth users, while Facebook and others have fought– its ability to survive in the United States remained under a cloud of uncertainty. Would regulators step in and kill a product that has become a staple of communications for about 100 million Americans?
That cloud seemed to lift in its wake last week reports that TikTok will enter into a data storage agreement with Oracle. In the short term, the deal would be good for US users as it would allow TikTok to invest more resources and energy into improving its product rather than wrestling with the government.
But in the long term, the prognosis looks bleaker. The deal would set precedents that could hurt tech companies and their users.
The main concern US politicians have expressed regarding TikTok is that the Chinese government could potentially access all American data held by the company since it is owned by China’s ByteDance. The other big concern was the security risk. This deal would appeal to both. Under the agreement, Oracle would store TikTok data for US users, ensure data is not transferred to ByteDance, and be responsible for protecting user data from cybersecurity threats. With this sensitive job being handled by a US government-affiliated company, TikTok should finally be able to allay concerns that its operations in the United States pose a serious threat to American security.
Of course, the agreement demands financial and technical costs from TikTok. The company pays for third-party data storage, even as its competitors have tried to reduce their own costs and improve performance by storing data in their own own Data centers. Still, the deal is far better than being banned or being forced to cede a majority stake in a US company, two outcomes that seemed to be in the offing plausible in Summer 2020. The cost is worth it because it frees TikTok to compete with its greatest strength: its product.
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