The day after we published this blog post, Business Insider shared an update stating that “both sides agreed to extend the deadline for filing documents to February 18.” The previous deadline had been January 19, the day before then-President-elect Joe Biden’s inauguration. Business Insider added that “Trump’s months-long fight to ban TikTok looks set to end in failure.” Experts believe that President Biden remains unlikely to fight for the ban and forced sale.
"The TikTok ban was a reactionary, poorly considered policy decision," agrees Billy Easley II, who works on tech policy at Americans for Prosperity, a Washington think tank. He adds it was "no surprise" a US court halted Trump's ban in September just before it was due to take effect.
Will we try to keep you apprised as this saga reaches its conclusion.
This past fall, we shared a 3-part series tracking and analyzing the surprising chain of events that transpired between Oracle and TikTok following the Trump Administration’s attempted ban of the social media platform in the summer of 2020. In a nutshell, President Trump was publicly embarrassed by the low turnout at a campaign rally that was widely promoted as his return to direct communication with his base. Shortly after, some members of TikTok – a social media platform that overwhelmingly caters to teens – credited themselves for bombing the event by reserving tickets with the intent that they were to go unused. Scarcely six weeks later, the President turned his attention to TikTok and attacked the U.S. presence of the Chinese-owned social media company.
Perhaps unsurprisingly, what started as a ban predicated on national security concerns quickly took the shape of a forced sale for the benefit of the U.S.-based company of the Trump Administration’s choice. Our three blog posts followed how years of strategic and political connections with the Trump Administration led to Oracle being awarded the controversial, if lucrative, contract, and we provided some speculation regarding why Oracle would even want to be connected with a teen-focused social media site with national security concerns. (Our conclusion? It’s about the Cloud.)
In the time since we published Part III, Trump lost the Presidential election and a new administration will occupy the White House later this week. So, how does it appear the Trump/Oracle/TikTok saga will end?
All told, nothing much has come to pass since our last update in October. TikTok is clearly still functioning in the U.S., with Fortune reporting the following:
TikTok and TikTok content creators filed various lawsuits against Trump's executive order. In October and December, two federal judges ruled in separate cases against the administration's ban, effectively blocking the government from carrying it out. On Dec. 28, the Trump administration filed an appeal against the December injunction.
While the U.S. Commerce Department repeatedly extended deadlines set for ByteDance to either complete the sale of TikTok's U.S. business or face a U.S. ban, the most recent ByteDance deadline passed with zero publicity and without renewal.
Time has all but run out for the Trump administration to finalize anything in the culminating days of Trump’s presidency. And given his impeachment after the unprecedented attack on the U.S. Capitol on January 6th, one can only imagine that Trump has other things on his mind at this point in time. Suffice to say, it is incredibly unlikely that the deal with Oracle will be finalized prior to Biden’s inauguration on January 20th.
Some reports speculate that a Biden administration will be less critical concerning TikTok, especially with regard to its ownership:
Robert Atkinson, the president of the Information Technology and Innovation Foundation, which is funded by U.S. tech companies, said the TikTok ban was “much more of a Trump issue” that Biden might drop.
Additionally, other sources have suggested that the Oracle deal to buy TikTok “will likely face additional possibly lengthy scrutiny” from a Biden Administration and is unlikely to be approved. Further, with a new administration in place, some suggest that TikTok could reinitiate talks regarding U.S. security concerns, thereby obviating the alleged need for the sale. It helps that “many Chinese tech companies hope [the Biden administration] will be more predictable to deal with than Trump’s techno-nationalist stance.”
While Oracle has declined to comment on whether Ellison’s public support of Trump had any play in Oracle’s efforts to secure a TikTok deal, it seems certain that Oracle’s best and only chance to buy TikTok was under the Trump Administration. If true, the past several years of currying favor with Trump will have no play in helping Oracle achieve that goal under the new administration.
What does all of this mean for the Oracle licensee? Recall that Oracle itself advertised that this purchase would entitle the company to TikTok’s existing cloud servers, therefore immediately increasing its standing in the cloud wars. Additionally, The Wall Street Journal reported, “Oracle’s prime motivation to gain a high-profile customer for its cloud business was crystal clear in its announcement over the weekend about becoming TikTok’s ‘secure cloud technology provider.’”
It is hard to imagine that Oracle will be complacent about this lost opportunity, and we consider it almost a certainty that Oracle will double down on alternate manners in which to increase their standing in the cloud wars. With the very real possibility that Oracle will prevail in its currently pending motion to dismiss in the Oracle Securities Litigation, we believe that the Oracle licensee will bear the brunt of Oracle’s disappointment.
And, as always, this means that the Oracle licensee can anticipate more of the same: a continued increase and focus on aggressive licensing and auditing tactics in 2021.
Published on 1/18/2021
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