ByteDance retains TikTok United States control and take the subsidiary to the stock exchange - The tech culebron of the summer still has loose ends to tie. ByteDance, after confirming an agreement with Oracle and Walmart to create a subsidiary application of short videos TikTok in the united States that will have the name of TikTok Global, has nuanced this Monday that will keep the majority control of the new company, as their participation in it will remain in the 80% of the capital after a round of financing prior to the ipo of u.s. subsidiary.

"After the financing, TikTok Global will become a subsidiary with 80% of its shareholding owned by ByteDance," the company details in a statement on the Chinese news platform Toutiao, which is also owned. The new company will have on its board of Directors the founder and directors of ByteDance, as well as the CEO of Walmart, one of the US partners, although it does not mention the representation that will have Oracle, which this weekend announced that it will take a 12.5% stake in the company.

In this way, TikTok will retain control of its subsidiary in the United States, which will carry out "a small round of financing" and subsequently launch an IPO to be listed on the stock exchange, a plan with which it aims to "improve the corporate governance structure and transparency," according to central china.

This statement contrasts with US President Donald Trump's statements over the weekend, when he assured that the new Global TikTok "will have nothing to do with a foreign country." "It will have nothing to do with China, it will be completely safe. This is part of the agreement, " said the US president according to CNBC.

Trump forced ByteDance to seek a U.S. partner to keep TikTok running in the country, an application he considered a cyber-espionage tool, by signing an executive order that would ban TikTok's operations with citizens of this country if it was not sold to a local company from mid-September, with a ban on new downloads since last Sunday, September 20 and the closure of the application from November 12.

ByteDance retains TikTok United States control

Another of the nuances made by the Chinese company refers to the algorithm, one of the aspects that has been disputed during the negotiation of the sale of the American subsidiary. According to Bytedance, the agreement with Oracle does not imply that the U.S. company will have access to the TikTok algorithm, but will only have the authority to "verify the source code" in order to resolve potential local data security issues.

In the ByteDance statement it is recalled that this is common, since Microsoft has since 2016 A Center for technological transparency in Beijing or Cisco a similar facility in Bonn (Germany).

The video recommendation algorithm is one of the keys to TikTok's business, which has about 100 million users in the United States. This algorithm feeds the "For You / FYP" section of the app, which offers users a seductive mix of highly viral and shareable random short videos.

"We haven't seen anyone else master the recommendations as successfully as they have," said Business Insider Sabba Keynejad of Veed, a video editing app that tried to reverse engineer the algorithm.

On the other hand, ByteDance also responded in its statement to another of Trump's statements over the weekend, according to which the US President assured that the new company "will make a contribution of $ 5 billion (4.2 billion euros) in education."

The Chinese subsidiary said that this amount simply corresponds to an estimate of the taxes that will have to pay TikTok Global "in the coming years", but the actual amount "still to be determined" based on the results of the US subsidiary.

End of the article ByteDance retains TikTok United States control


More news:

Facebook doubts about the continuity of its business in Europe if Ireland finally prohibits the transfer of data from its users to the US

Facebook and Instagram services in the European Union."it is not clear how the company could continue to provide Facebook and Instagram services in the European Union."

These are the words of the Data Protection Officer for Facebook in Ireland, Yvonne Cunnane. His statements appeared this Sunday in the Sunday Business Post, and have been collected by several international media such as Reuters.

It is the first public consideration made by Mark Zuckerberg's company after the intention of the Irish Data Protection Agency became known last week: to ban Facebook from continuing to transfer data from European users to the United States.

The Irish Supervisory Authority has on the table the power to enforce this veto through an executive order that would comply with the judgment of the Court of Justice of the European Union last July.

By that ruling, the CJEU ruled that the Privacy Shield, the regulatory framework by which companies can transfer data from European citizens to the United States, was invalid. The reason: the management, control and processing of user data in the North American country does not have enough guarantees to be equated with European regulations.

Although the CJEU knocked down the Privacy Shield, tech companies like Google and Facebook have clung to standard contract clauses, or SCCS for its acronym in English.

These SCCs are legal mechanisms by which signatures can transfer the data of their European users to third countries outside the Union, provided that certain guarantees are provided for.

Noyb is an association of European privacy activists that was, in fact, the one that challenged the application of the Privacy Shield at the CJEU. Following his judicial success, he filed more than a hundred complaints and complaints against companies across the continent for allowing their users ' data to continue to be transferred to the US through SCCS.

While technology companies understand that the cancellation of the Privacy Shield does not suspend the possibility of using SCCS to derive data from European citizens to the US, Noyb believes otherwise.

Facebook's Facebook data manager, Yvonne Cunnone, made the first reaction in this context:"it is not clear to Facebook how it will continue to provide its services in Europe under these circumstances."

Instagram Facebook Facebook opens the door for its two main social networks —Facebook and Instagram itself— to stop serving European citizens because of this problem. WhatsApp, also owned by Facebook, does not enter the equation: its communications are private and the technology does not do business directly with the data of its users —for the moment—.

It could also affect its virtual reality glasses business, after this month Facebook introduced the new Oculus Quest 2 for which its users must have an account in their social networks.

Despite this first consideration of Facebook, noyb fears that the company alleges before the eventual executive order of the Irish Data Protection Agency the need to subcontract the processing of its users ' data to its branches in North America. This maneuver could serve to further delay the process of suspending these data transfers.

You may also find interesting: