TikTok finalizes Trump deal that allows ByteDance to maintain some control

The agreement regarding TikTok's operations in the United States has been finalized, prompting Donald Trump to declare it a significant victory. However, the extent to which this joint venture alleviates Congress's national security worries remains uncertain. In a recent announcement, TikTok unveiled the formation of 'TikTok USDS Joint Venture LLC,' designed to ensure the platform's continued presence in the American market. While the deal grants majority ownership to American entities, ByteDance, the Chinese parent company, retains a 19.9% stake in this venture, valued at approximately $14 billion. Three key investors—Silver Lake, Oracle, and MGX—each possess 15% shares, alongside additional smaller stakes held by other investors, including the Dell Family Office. Control over the joint venture's board will also primarily reside with American stakeholders, who will appoint a seven-member board. TikTok's CEO, Shou Chew, will occupy ByteDance's sole board seat. In an internal memo shared with TikTok employees, Chew hailed the finalization of the deal as a significant achievement, as reported by The New York Times. The joint venture will be led by two former TikTok executives: Adam Presser, formerly the global head of Operations and Trust & Safety, who will take on the role of CEO, and Will Farrell, who previously oversaw Business Operations Protection, appointed as chief security officer. Trump argues that this arrangement meets the criteria for 'qualified divestiture' necessary to avert a ban on TikTok, as stipulated by the Protecting Americans from Foreign Adversary Controlled Applications Act. Nevertheless, skepticism lingers among lawmakers who have yet to evaluate the deal's specifics to confirm its compliance with legal requirements. Critics highlight that the law mandates a complete severance of any 'operational relationship' between ByteDance and TikTok in the U.S., a condition that could pose challenges, considering ByteDance's retained control over various operational aspects. While U.S. stakeholders will oversee the algorithm and data security, ByteDance will still manage the algorithm itself, along with global product interoperability and certain commercial functions, including e-commerce and advertising. This arrangement suggests that the U.S. TikTok will maintain ties with its international counterparts, a compromise seemingly accepted by the Trump administration to keep the app operational without isolating it from the global landscape.