Popular social media app TikTok has reached a deal that prevents it from being banned in the United States.
TikTok’s privately held Chinese owner, ByteDance, has finalized a deal to set up a majority American-owned joint venture.
In doing so, TikTok avoids a U.S. ban of its popular short form video app that is regularly used by more than 200 million Americans.
The deal comes after years of battles that began in 2020, when U.S. President Donald Trump first tried unsuccessfully to ban the app over national security concerns.
The new American company, called TikTok USDS Joint Venture LLC, will secure U.S. user data, apps, and the algorithm through data privacy and cybersecurity measures, said ByteDance.
The new U.S. entity involves several prominent investors, including cloud computing giant Oracle (ORCL) and private equity group Silver Lake.
The partners in the new U.S. joint venture will hold a combined 80.1% stake in the U.S. version of TikTok, while ByteDance will retain a 19.9% interest.
Several governments around the world, including Canada, have banned civil servants from having the TikTok app on their work phones over security concerns.
ByteDance has been accused of using the TikTok app to conduct spying operations for the Chinese government.
As a privately held company, ByteDance’s stock does not trade on a public exchange.
Tech Insider
