Strategic transfers of ownership of TikTok's US unit seem to suggest that many of the core businesses of the company would not be under the control of the new owners-a concern that, some analysts hold, brings into light both the national security interests of the US and the fate of the company.
How Does UAE Based MGX Involved with TikTok?
Oracle, Silver Lake, and UAE-based MGX would have direct control over a 45% equity stake in TikTok US, which is supposedly responsible for its involvement in matters of national security such as data security, algorithm security, and content tracking.
It further enunciated that the new owners would not have full control over other important business divisions of the company such as TikTok Shop, advertising revenue, and marketing operations. This may well indicate that even with the new ownership in place, ByteDance would still exercise certain powers over some major commercial considerations.
Other Reason
The other interesting thing is that TikTok has had national security being an issue because its biggest stakeholder, ByteDance, is a Chinese company; and it had been argued that it would be inappropriate for a company based in China to control directly the data of the users in the US. The significance of these regulatory changes is therefore critical for TikTok to continue its operation in the country.
As Per The Memo
As per the memo, ByteDance will exercise the bulk of commercial operations, while the new entity, TikTok USDS Joint Venture LLC, will supervise data protection, content control, and algorithm security of TikTok.
What Does The Analysts Say?
The leak has reignited the discussion around TikTok in US tech and business settings. A number of analysts say that this could just mean that on-paper US control while in action ByteDance will be able to hold its shares with little bearing on the core business.
The deal approximately went for $14B, much lesser than past evaluations, perhaps on account of lack of proper assignment of controls over key business areas to new owners.
Conclusion
How transparent and independent TikTok can remain moving forward in the US commercial environment is an open question, especially considering the original owner retains control over global user data, content monitoring, advertising, and e-commerce.
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