US House passes bill paving the way for TikTok ban
Rumble reveals intention to purchase TikTok, but Oracle remains absent from the fray
The US House of Representatives on Wednesday passed a bill that could spell the end for TikTok in America.
The legislation, purportedly aimed at safeguarding national security interests, gives ByteDance, the Chinese parent company of the popular social media app, a six-month ultimatum to sell its controlling stake. Failure to comply would result in a nationwide ban on TikTok.
While the bill has cleared the House, it must now navigate the Senate and secure the president's signature to become law.
Key proponents of the bill, such as Wisconsin Republican Mike Gallagher, argue that allowing a platform as influential as TikTok to be controlled by a company tied to the Chinese Communist Party poses an unacceptable risk to national security.
As in the US, Chinese companies, under a national security law, are obligated to share data with the government upon request, raising fears about the safety and privacy of TikTok users' data.
TikTok has attempted to allay these concerns by emphasising its commitment to data security and privacy. However, reports have surfaced suggesting vulnerabilities in the system, with data potentially being shared between TikTok's US operations and ByteDance in China.
The bill's passage has drawn mixed reactions, with some Democrats welcoming it as a crucial step in protecting user data from exploitation by foreign adversaries. However, opposition from both sides of the political spectrum remains.
Former president Donald Trump, who sought to ban TikTok during his tenure, has recently voiced concerns against the bill, raising questions about its prospects in the Senate.
One of the significant hurdles facing ByteDance is finding a buyer for its stake in TikTok.
The company has previously valued the app at a staggering $268 billion, and the potential buyers may be deterred by the hefty price tag, especially considering the challenges encountered during previous attempts to sell the platform.
Rumble makes bold move
Rumble, a streaming and video platform, on Tuesday publicly announced its intention to purchase TikTok if the US government moves forward with its plans to restrict the Chinese-owned app.
Rumble's CEO, Chris Pavlovski, extended the offer to ByteDance, addressing Shou Zi Chew, the CEO of ByteDance, via social media.
In a letter, Pavlovski outlined Rumble's readiness to collaborate with other interested parties to acquire and operate TikTok.
"We are ready to serve as a cloud technology partner," Pavlovski stated in the letter, indicating Rumble's preparedness to play a pivotal role in the potential acquisition.
The announcement comes hot on the heels of Rumble's recent unveiling of Rumble Cloud, a service aimed at providing cost-effective solutions to businesses while championing principles of free speech and an open internet.
The response to Pavlovski's offer has been met with enthusiasm in the financial markets, with the stock price of the company experiencing a significant surge.
Oracle remains absent from the fray
Despite its status as TikTok's most powerful corporate partner in the US, Oracle has notably refrained from actively engaging in the behind-the-scenes manoeuvring surrounding the impending bill.
In 2020, during the previous attempt to force a sale of TikTok, Oracle and Microsoft emerged as primary contenders. Although Oracle appeared to secure a deal with support from Walmart, the transaction was thwarted by legal challenges, leaving the future ownership of TikTok unresolved.
Currently, Oracle hosts TikTok's US data, a relationship valued at approximately $1 billion. However, the potential sale of TikTok could jeopardise this lucrative contract, particularly if the platform's data migrates to a competing cloud provider, such as Microsoft.
While TikTok has voiced its desire for Oracle to take a more proactive stance, company representatives have indicated that its role primarily is safeguarding the integrity of TikTok's data.
Other options for TikTok
Given the formidable financial hurdles associated with a potential acquisition, joint bids involving multiple players, akin to the Oracle-Walmart partnership in 2020, could offer a viable path forward.
Alternatively, if the ban is approved, TikTok may explore options such as an initial public offering or a spin-off to shareholders as alternatives to a direct sale.