TikTok Averts US Ban with New Ownership Structure
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A deal to transfer parts of TikTok’s US operations to non-Chinese owners has been finalized, averting a potential nationwide ban of the popular video app. The agreement, years in the making, resolves national security concerns that have plagued the platform for nearly five years.
TikTok and its parent company, ByteDance, have officially established a new company to facilitate the transfer of its US business to a consortium of American and international investors. This move is designed to safeguard TikTok’s future within the United States and preempt a prohibition that loomed large over the app’s operations.
A Long-Fought Battle Reaches Resolution
The resolution concludes a complex geopolitical and regulatory struggle that began to intensify in 2020. A law passed by the US Congress in 2024 mandated that ByteDance divest ownership of TikTok or face a ban. Lawmakers expressed apprehension that the Chinese government could potentially exploit access to US user data or leverage the platform to disseminate pro-Beijing propaganda. TikTok has consistently refuted these allegations, stating that such abuses have not occurred.
“This sale ends a power struggle that repeatedly threatened the app’s existence in the USA,” one analyst noted.
Key Investors in the New TikTok Structure
The newly formed US company will be backed by three prominent investors: Oracle, the technology giant; Silver Lake Management, a leading private equity firm; and MGX, an investment company based in Abu Dhabi. The initial announcement of this potential arrangement dates back to September of the previous year, under the Trump administration.
The specifics of the ownership split and operational control are still emerging, but the deal signifies a substantial shift in TikTok’s corporate structure within the US market.
National Security Concerns at the Forefront
The core of the dispute revolved around national security. Concerns centered on the potential for the Chinese government to access the data of millions of American TikTok users. Lawmakers feared this data could be used for surveillance or manipulation.
“The US Congress passed a law in 2024 that would ban the app if ByteDance did not sell TikTok,” a senior official stated. “Lawmakers cited concerns that the Chinese government could abuse access to US user data or use the platform to spread narratives in Beijing’s favor.”
TikTok maintains its commitment to protecting user data and operating independently. Despite these assurances, the pressure to address US security concerns ultimately led to this landmark agreement.
The successful negotiation of this deal represents a significant turning point for TikTok, allowing it to continue serving its vast US user base while addressing the concerns of regulators and lawmakers. The long-term implications of this new ownership structure remain to be seen, but for now, TikTok’s future in the United States appears secure.
