Treasury Secretary Steven T. Mnuchin said Monday the Committee on Foreign Investment in the United States will begin this week reviewing a proposal for Oracle to acquire the Chinese-owned video app TikTok.
The proposed deal comes less than a week before President Trump, citing national security concerns over how TikTok handles the personal information of its users, set a Sept. 20 deadline to avoid a ban of app, which claims 100 million users in the U.S. and more than 700 million worldwide.
The president has demanded that TikTok to turn over its U.S. business to an American firm.
“We did get a proposal over the weekend that includes Oracle as the trusted technology partner, with Oracle making many representations for national security issues,” Mr. Mnuchin said on CNBC on Monday.
“There’s also a commitment to create TikTok Global as a U.S.-headquartered company with 20,000 new jobs,” Mr. Mnuchin said. “I’m not going to go into the entire proposal. We will be reviewing that at the CFIUS committee this week and then we will be making a recommendation to the president and reviewing it with him.”
CFIUS is a U.S. government committee led by Mr. Mnuchin that reviews commercial transactions for potential national security problems, and its purview was broadened by the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). In addition to the CFIUS review, Mr. Mnuchin said there is an ongoing national security review of TikTok.
For any deal to get done, Mr. Mnuchin said the U.S. government will need to know that Americans’ data and phones are secure when using TikTok and that the computer code is secure.
Oracle on Monday confirmed that it is part of a proposal submitted by TikTok’s owners, ByteDance, to the Treasury Department. A TikTok representative said Monday that the company believes the proposal will resolve the Trump administration’s security concerns.
While Mr. Mnuchin sounded open to Oracle’s acquisition pending a review by various technical teams, the Chinese regime may still try to stop an American company from buying TikTok. China’s state-run media CGTN said Monday that ByteDance would not sell TikTok to Oracle.
TikTok may quickly run out of options if the Oracle deal falls through. After speaking with Mr. Trump about its desire to take control of TikTok, Microsoft said Sunday that ByteDance said it would not sell TikTok’s U.S. operations to Microsoft.
“We are confident our proposal would have been good for TikTok’s users, while protecting national security interests,” Microsoft said in a statement on its website. “To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement. We look forward to seeing how the service evolves in these important areas.”
While TikTok is working to comply with Mr. Trump’s August executive order effectively banning the app if no deal gets done this month, TikTok is also suing the Trump administration over the executive order.