The Technology 202: TikTok just aligned with one of Trump’s few Silicon Valley allies with Oracle deal

TikTok, the short-form video app, chose Oracle to be its “technology partner,” my colleagues report. Despite Trump’s order that would essentially require its Chinese parent company to divest from its U.S. operations, TikTok is now proposing to regulators that ByteDance  would continue to own the service but outsource cloud management of the data. 

Oracle’s pro-Trump leaders could give the companies a key edge as they attempt to satisfy the administration’s national security concerns. 

Oracle’s chairman Larry Ellison hosted a high-profile fundraiser for Trump, who has been an outspoken critic of many tech titans, earlier this year. Chief executive Safra Catz has worked closely with the administration since the early days, serving on the executive committee of Trump’s transition team when he was president-elect. 

But it remains to be seen whether the arrangement will appease the White House, which has raised concerns that TikTok is sharing Americans’ data with its Chinese owner ByteDance. Another possible element of the proposal is that ByteDance would move its headquarters out of China to address concerns that Chinese law may require the company to turn over customer data to the government, Jay Greene, Rachel Lerman and Ellen Nakashima report. 

Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross are willing to hear the proposal, they add.  

Its business is focused on providing database technology to corporations. But its executives began making more inroads in the Trump universe much earlier than many other tech companies.  

The company also worked closely with Trump in the pandemic response. Ellison arranged a partnership between the software company and the government to collect data in real time from doctors trying out unproven drugs, including chloroquine and hydroxychloroquine, on coronavirus patients. 

When asked about potential acquirers of TikTok earlier this year, Trump said Oracle “would be certainly somebody that could handle it.”

A former U.S. official told my colleagues that while the companies’ proposal might address some of the security concerns, “it’s well short of a U.S. company taking over the asset and the algorithm, and politically, it would be a massive climb-down from what the president said he was going to accomplish with this.”

TikTok’s algorithm is widely viewed as the company’s secret sauce that has allowed it to surge in popularity among American teens during the pandemic. However the company decided not to hand over that source code to any U.S. partner or acquirer, Bloomberg reports. 

Trump previously issued an order that would effectively ban the app in the United States beginning Sept. 20 if it were not acquired by an American company, and his second order required ByteDance to divest. 

Some tech experts were skeptical the most important national security concerns would be covered in this arrangement.  

From Alex Stamos, the director of the Stanford Internet Observatory and former Facebook chief security officer: 

Microsoft, which was widely seen as the frontrunner to acquire the app, also confirmed yesterday its proposal was rejected. 

“We are confident our proposal would have been good for TikTok’s users, while protecting national security interests,” the company said in a statement. “To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation, and we made these principles clear in our August statement.” 

Law enforcement agencies said they were flooded with calls last week as misinformation circulated on the social network that the fires were started by an extremist group. Andy Stone, a company spokesman, laid out the company’s new policy on Twitter:

It’s rare for Facebook to remove false posts on its service, and some tech observers said the company should be praised for the move. However critics questioned why the social network didn’t act faster, especially as police departments in Oregon publicly raised the issue on Thursday. 

Stone says that the company began applying warning labels on Thursday after several Facebook third-party fact-checkers assessed claims as false.

The false claims are also widely circulating in private groups, which are more difficult for the company to moderate than public posts on the service. Stone says Facebook’s enforcement actions apply to those groups. 

The attorneys general, led by Texas Attorney General Ken Paxton (R), have been running a parallel investigation into Google’s advertising business. The complaints are likely to remain separate, according to Bloomberg News. 

The lawsuit, which is expected to be filed as soon as this month, would be the biggest antitrust action in the United States since the government charged Microsoft with violating antitrust law in 1998. 

So far the states have not seen a full complaint from the Justice Department, which could affect how many ultimately sign on to the complaint. It is also unclear whether Democratic attorneys general will sign on.

Democratic and Republican attorneys general have clashed over the scope of their investigation into Google. Democrats want to probe the company more broadly, including its mobile Android operating system, which could lead to additional complaints beyond what Paxton is planning.

Google is also facing ongoing congressional scrutiny. The Senate Judiciary Committee on Tuesday will hold a hearing on Google’s potential harm to online advertising competition.

Twitter said the post violated the platform’s rules about civil and election integrity. Facebook’s label asserted the historical trustworthiness of mail-in voting. But neither label points out that voting twice could also break the law.

“Per the North Carolina State Board of Elections, voting twice in the state is illegal,” a Twitter spokesperson said in a statement to CNN. “To protect people on Twitter, we err on the side of limiting the circulation of Tweets which advise people to take actions which could be illegal in the context of voting or result in the invalidation of their votes.” 

North Carolina Attorney General and state election officials have explicitly encouraged voters not to show up in person. 

North Carolina Attorney General Josh Stein:

This was the second instance this month in which Twitter labeled the president’s tweets encouraging voters to vote in person and by mail. Twitter has also labeled tweets by the president suggesting that mail-in voting is not secure or sanitary.

Tech workers have been fleeing San Francisco for cheaper cities since the start of the pandemic. Now, some tech companies are dealing with the changes in cost of living by slashing salaries.

Shannon Morse of Infosec called it wage theft:

Economists also chimed in about the potential impact on labor. The Roosevelt Institute’s Mike Konczal:

Others pointed out that it’s likely to lead to tech companies having increased power over the labor market. Economist Hal Singer:

• The Justice Department’s Antitrust Division and the Federal Trade Commission will co-host the 19th annual International Competition Network (ICN) Conference online today through Thursday.
• The Senate Judiciary Committee will hold a hearing, “Stacking the Tech: Has Google harmed competition in online advertising?” tomorrow at 2:30 p.m.
• Facebook Connect will take place virtually on Wednesday.
• Future Tense at New America will live-stream the event “How Should We Talk About QAnon?” on Wednesday at noon.
• The House Energy and Commerce Committee will hold a virtual hearing, “Trump FCC: Four Years of Lost Opportunities,” Thursday at 10 a.m.
• The Senate Judiciary Committee will hold a hearing to examine threats to U.S. intellectual property, focusing on cyberattacks and counterfeits during the coronavirus pandemic on Sept. 23 at 2:30 p.m.