The consolidation of the sale of the company that controls the TikTok platform in the United States, one of the biggest businesses of the Chinese unicorn company ByteDance, should be consolidated this Thursday (22).
The operation was carried out under strong pressure from the United States government and dates back to Trump’s first term, being one of the recurring themes in his second campaign for the White House. The Chinese government took on the business as a way of maintaining good commercial relations.
In practice, decision-making power and data control leaves the hands of the Chinese – who will still have a 20% stake – and passes to companies aligned with the Trump government and allies, such as the MGX fund, owned by the United Arab Emirates royal family, and Oracle, a United States company that will manage data storage.
The transaction is estimated at US$14 billion, according to the American vice president, James Vance. TikTok is the fourth largest platform in the United States, with around 170 million users.
“There is a paradox there because the United States, with this movement of economic neoliberalism, uses at the same time the justification of national security to be able to control the data of its population. It affects, at the same time, the free market and also freedom of expression, which was often questioned as there was a threat to close the platform”, assessed Andressa Michelotti, a specialist in regulation and disinformation.
According to Andressa, who is also a researcher at the Federal University of Minas Gerais (UFMG) and the University of Utrecht, the power game is not just about controlling the data.
The name at the head of Oracle’s participation in the business is Larry Ellison, who has been called brolygarch, that is, big businessmen aligned with the interests and partners of government officials. Trump has surrounded himself with some of them, such as the former president of Meta, Mark Zuckerberg, and his ally during the beginning of his government and owner of SpaceX, Elon Musk.
The forced acquisition ignored ByteDance’s claims that the company operated transparently and independently from the Chinese government, which has a smaller stake, while 60% of the capital is open to international funds such as Blackrock, General Atlantic and Susquehanna.
Another 20% of TikTok’s capital is spread among its employees, including the 7,000 American employees. The remaining 20% is owned by the founders, the only known one being Zhang Yiming.
Despite the company denying state control, the Beijing government spoke out about the so-called TikTok War:
“The Chinese government hopes that the relevant parties can reach a solution regarding TikTok that complies with Chinese laws and regulations and achieves a balance of interests,” Ministry of Commerce spokesperson He Yongqian said in December when the negotiation was announced.
Different servers and application
Among the sometimes conflicting information circulating in specialized media in the United States is that the change would not only involve servers but the application itself, with unknown impacts in relation to the structure of the platform, its appearance and functionalities. As with Musk’s acquisition of Twitter, and his move to X, there are a number of uncertainties and possibilities.
“How does this TikTok break up in the United States? Then comes a nationalization, which leaves a separate platform, or will it still have an architecture that communicates in some way with the platform in other countries? Then comes another question, what is the transition of this data from one place to another like?”, asks Andressa, for whom balkanization (isolation on local platforms) is one of the possible paths, among others.
The questions also include how data from users in the United States will be accessed on servers outside their territory, such as Europe, China or Latin America, as well as the reverse.
“It could be that TikTok becomes a completely different company, even less interesting. It could be that they add another design, other elements, it could be more mirrored on other American platforms. This will also influence other platforms in their own design and architecture. It’s not just changing an algorithmic key and that’s it, it’s nationalized. There are content moderators, platform policies, what can and can’t”, ponders the UFMG researcher.
The answer will essentially depend on how the new company will deal with transparency.
Tik Tok already operates in local companies, including due to national regulations. There is a company, for example, for operations in the United Kingdom; another in the United States and another here in Brazil.
This situation already leads to a conflict regarding the ways to conduct business, which also occurs in other media, such as Instagram, Discord or X.
There is a relationship between the architecture of controlling companies and local legislation that is important for defining moderation policies, data protection and responding to national legal demands, but which also results in content moderation controversies, pressure against certain positions or even expulsion of users.
An example of this is Tik Tok’s adaptation to content moderation for children under 13 in Europe. According to Chinese state media company CGTN, the platform will begin a content moderation policy for this audience from next week, following controversy involving cases of self-harm motivated by content on its servers.
The details of this other policy are being revealed little by little, but there is already talk of banning users after human review of content considered abusive by the security mechanism, which will operate based on automatic scanning.
*Brazil Agency
