TikTok Establishes Joint Venture to Comply with U.S. Legislation
TikTok has officially announced the formation of a new joint venture with several U.S. partners, aimed at fulfilling the stipulations outlined in the Protecting Americans from Foreign Adversary Controlled Applications Act. This strategic move ensures the platform’s continued availability for American users.
According to a statement from TikTok,
“Today marks the establishment of TikTok USDS Joint Venture LLC, complying with the Executive Order signed by President Trump on September 25, 2025, allowing over 200 million Americans and 7.5 million businesses to continue their engagement and growth within TikTok’s vibrant ecosystem. This predominantly American-owned venture will implement safeguards that protect national security, incorporating extensive data protection, algorithm security, content moderation, and software assurances for U.S. users.”
The principal objective of the USDS Joint Venture is to fortify U.S. user data, applications, and the algorithm itself via comprehensive data privacy and cybersecurity protocols.
“It will reinforce the U.S. content ecosystem through stringent trust and safety policies, while maintaining continuous accountability through transparency reporting and third-party certifications.”
The initiative will be overseen by a panel consisting of seven members, including TikTok CEO Shou Zi Chew, Egon Durban from Silver Lake, and Kenneth Glueck from Oracle. This governance structure is designed to ensure that both operational integrity and compliance with U.S. regulations are achieved.
Moreover, the newly formed venture will not only encompass TikTok, but also include CapCut and Lemon8, along with “a portfolio of other applications and websites in the U.S.”
Significantly, TikTok’s algorithm is poised for a substantial rewrite:
“The Joint Venture will retrain, test, and refine the content recommendation algorithm using U.S. user data, with the algorithm being secured within Oracle’s U.S. cloud infrastructure.”
This adjustment could lead to changes, contingent upon the precise requirements placed on the group and the permissible level of data exchange with TikTok’s headquarters in China.
Importantly, TikTok clarified that U.S. users will not need to download a new application, contrasting prior reports suggesting otherwise.
After five years of negotiations, TikTok has successfully navigated the challenges posed by U.S. regulations, with both TikTok and its parent company, ByteDance, retaining substantial interests in the platform.
TikTok had a deadline of January 23 to satisfy the legislative requirements, following an extension granted by President Trump.
The Oracle-led joint venture proposal was first presented to TikTok executives in September, culminating in the final agreement after four months of meticulous discussions.
Earlier today, Semafor reported that an imminent deal was on the horizon, with U.S. and Chinese negotiators finally reaching a consensus.
As highlighted by TechCrunch,
“According to a memorandum reviewed by TechCrunch, the investor consortium comprised Oracle, Silver Lake, and MGX collectively will command 45% of the U.S. operation, while ByteDance retains nearly a 20% stake.”
The newly established TikTok entity will essentially function as a distinct variant of the app within the U.S. market. However, users are reassured that they will not need to download a new application.
In another positive development for TikTok, the company has achieved a legal victory in Canada. A recent federal court ruling invalidated the Canadian government’s attempts to force the company out of the local market over national security concerns.
Back in November 2024, the Canadian government issued an order mandating TikTok’s cessation of operations within the country due to purported national security threats.
Then-Canadian Innovation Minister Francois-Philippe Champagne stated that the decision was rooted in “national security risks” pertaining to TikTok’s local activities.
While specific details remained elusive, authorities expressed concern regarding the operations conducted in TikTok’s Canadian facilities. However, the court’s ruling means that TikTok’s local business will remain operational, much to the relief of its employees and creators.
Additionally, it is the Canadian government’s recent signing of a new bilateral agreement with China.
Despite ongoing concerns about foreign surveillance and potential manipulation, TikTok remains functional across multiple regions and continues to serve its vast user base.
This development has elicited mixed sentiments concerning the implications of foreign interference, which could evolve into a more significant issue over time.
Nonetheless, TikTok has successfully navigated a challenging landscape, as President Trump assured it would be possible.
Source link: Marketingdive.com.
