What You Need to Know About TikTok's New Deal to Operate in the US

TikTok has finalised a deal to continue its operations in the US amid security concerns. This agreement involves a new joint venture with major investors like Oracle and MGX, addressing previous uncertainties surrounding the platform.

AP TikTok has secured a deal to continue its operations in the US after years of uncertainty. This agreement, involving major investors like Oracle, Silver Lake, and MGX, has formed a new TikTok US joint venture. However, questions linger about potential changes in user experience and whether these changes address security concerns surrounding the app.

American TikTok users will keep using the same app, but it's unclear how their feeds might change. The algorithm, which is crucial for its engaging video feed, will be licensed from ByteDance. It will be retrained using US user data, potentially altering personalised feeds. Jasmine Enberg from eMarketer noted that any noticeable changes could risk alienating users.

Security Concerns and Algorithm Changes

The updated Terms of Service indicate that while users own their content, TikTok can use it to improve the platform. Users under 13 will have a restricted experience. Additionally, those posting AI-generated content must label it accordingly. Despite these updates, the deal doesn't fully address security concerns raised by lawmakers.

Congress passed legislation in 2024 requiring TikTok's divestment from ByteDance due to fears of Chinese government influence. The law prohibits cooperation on content recommendation algorithms between ByteDance and new American owners. It's uncertain how ByteDance's continued involvement will unfold since they will license the algorithm to the US entity.

Impact on Businesses and Creators

Skip Chapman, co-owner of KAFX Body in New Jersey, launched his business on TikTok in April 2023. He expressed relief over the deal as it removes the threat of a ban that loomed over his business. While he remains optimistic about TikTok's future under new ownership, he worries about potential shifts in e-commerce priorities.

Vanessa Barreat, owner of La Vecindad Mexican restaurant in Las Vegas, has over 100,000 followers on her restaurant's TikTok page. This visibility has helped attract customers and reduce marketing costs. She remains cautiously optimistic about the deal's impact on her business.

Political Ties and Content Moderation

Larry Ellison, Oracle's co-founder with ties to former President Trump, is now a key figure in this deal. His involvement raises concerns about content moderation and potential political bias on American users' feeds. Forrester analyst Kelsey Chickering warned that biased moderation or misinformation could drive users to rival platforms.

"If moderation happens to tilt toward one political viewpoint or fails to curb misinformation, TikTok risks a user exodus to rival platforms," Chickering said. "We've seen this before when Twitter's transformation into X triggered fallout from users and advertisers."

The retrained algorithm will make trends feel distinctly American while still featuring global content with altered rankings. This change could affect TikTok's cultural appeal and engagement levels among users.

TikTok claims US creators will remain discoverable globally, allowing businesses to maintain their reach. However, how interoperability between the US and ByteDance will work remains uncertain.

The new ownership structure aims to address security concerns while maintaining TikTok's global presence. As changes unfold, both users and creators are adopting a wait-and-see approach regarding potential impacts on their experiences and businesses.

With inputs from PTI