TikTok’s new US joint venture avoids a ban but leaves questions over algorithm changes, user experience and national security oversight.
WASHINGTON: TikTok has established a majority American-owned joint venture to operate its US business, deflecting a potential ban over its Chinese ownership.
The deal ends a long legal saga but its consequences for the platform’s 200 million US users remain unclear. Users do not need to download a new app, but were prompted to accept new terms of service covering “new types of location information” and data usage.
At the heart of the ownership drama is TikTok’s powerful algorithm, which US lawmakers feared could be weaponised by the Chinese government. The new ownership has promised to “retrain” the algorithm, but its impact on the user experience is unknown.
TikTok insists US users will maintain a “global TikTok experience,” allowing US creators to be discovered internationally. However, the creation of a US-only algorithm raises significant questions.
“There are still questions of how this new entity will interact with other versions of TikTok globally,” said Jennifer Huddleston of the CATO Institute in Washington. She also wondered about “what influence the US government may have over the algorithm and the free speech concerns that could arise.”
A major investor in the new entity is Larry Ellison, who is also financing his son David’s media acquisitions. This potentially gives the family unprecedented power over US media.
Creators are watching closely as their income depends on the algorithm. Some have already migrated to other platforms due to the political turmoil.
The political chaos has likely taken a toll on TikTok, despite former President Donald Trump ultimately intervening to prevent a ban. The app faces intense competition from features like Instagram Reels and YouTube Shorts.
According to Emarketer analyst Minda Smiley, US TikTok users still spend more time on the app than on other social networks, but that time is declining each year. This signals the app is struggling to keep users hooked as it once did.
The divestment may have satisfied the Trump administration, but it may not satisfy lawmakers who passed the divest-or-ban law. ByteDance now owns just under 20% of the US company, with the rest held by mainly US firms.
“The TikTok deal has improved the privacy of exactly no one and has done nothing to improve national security,” said Kate Ruane of the Center for Democracy and Technology.
John Moolenaar, the Republican chairman of the House Foreign Affairs Committee, has vowed to conduct full oversight of the agreement. TikTok says key functions like e-commerce will remain tied to the global entity, which could pose data issues.
“I don’t know how you could accomplish e-commerce and not take data from me as an American user,” said University of Florida professor Andrew Selepak.
For Carl Tobias of the University of Richmond School of Law, “It seems like Trump has just eclipsed whatever Congress might have intended in terms of national security.”
