The fate of TikTok, the wildly popular video-sharing app, has involved plenty of plot twists since President Donald Trump signed an executive order in late August that promised to effectively ban TikTok from doing business in the US over national security concerns — unless the Chinese-owned app sold its US operations to an American company by September 20.
The latest turn: Microsoft, which had been seen as the frontrunner among several potential bidders, said on Sunday it isn’t buying the app. Instead, Oracle, a database software company whose co-founder and CEO are both open supporters of Trump, is the winning bidder.
But wait — Oracle isn’t actually going to buy TikTok. Instead, it’s offered to buy the rights to take over TikTok’s US data operations (which Microsoft also originally wanted to do, but Trump discouraged — more on that later), further complicating the situation.
The proposed deal between Oracle and ByteDance, the Chinese company that owns TikTok, involves a number of extraordinarily political, volatile, and complex factors. By this point, you may be confused about what’s going on and how TikTok got here in the first place. Here’s what we know so far, and what the implications of this deal are.
Right now, there’s still a lot we don’t know about the details of the proposed TikTok-Oracle deal, since the terms aren’t public.
But one thing we do know is that Oracle has said it’s proposing to become a “trusted technology provider” of ByteDance, rather than buying the company’s US operations outright.
Here’s Oracle’s statement Monday morning: “Oracle confirms Secretary Mnuchin’s statement that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider. Oracle has a 40-year track record providing secure, highly performant technology solutions.”
If this Oracle-TikTok proposal goes through as planned — not as a full sale — it raises the question of why President Trump issued the executive order pressuring TikTok to sell off its entire US operations in the first place.
Trump said he issued the executive order over grave national security concerns. Namely, that the Chinese government could allegedly pressure TikTok to funnel sensitive US user data back to Beijing because ByteDance is a Chinese-owned company. Another concern is that TikTok could be censoring topics on TikTok that the Chinese government doesn’t approve of.
TikTok has repeatedly asserted that it stores all US data in the US and Singapore, which would ostensibly make it difficult for the Chinese government to reach. It’s also denied censoring content in the US on behalf of the Chinese government.
While there isn’t any public evidence proving that the Chinese government has ever coerced TikTok to spy on US users or control what they see and discuss on the app, it’s also hard to rule out that could ever happen. The Chinese government regularly exerts authority over domestic companies for political purposes, such as pressuring tech companies to hand over user data.
What’s a real head-scratcher is that it’s not clear how Oracle handling TikTok’s US data — without spinning TikTok US into a separate company free from ByteDance’s oversight — would assuage any of these security or censorship worries.
“If these things were a concern before, it’s not clear why that wouldn’t be a concern now,” Bobby Chesney, a professor at the University of Texas who specializes in national security law, told Recode.
Although it’s unknown so far if Trump will approve this deal, Treasury Secretary Steven Mnuchin said about the deal on CNBC Monday morning, “We have a lot of confidence in both Microsoft and Oracle; they [ByteDance] have chosen Oracle.”
All this has unfolded as CFIUS, a US national security regulatory agency, is conducting an ongoing review into TikTok — a process that Trump seemingly bypassed to issue his executive orders about the app. Mnuchin said CFIUS’s technical teams will be reviewing the proposal with Oracle and ByteDance this week and that the agency will then issue a recommendation to President Trump on whether or not to approve the deal. He also said that, as part of the proposal, TikTok has promised to create 20,000 new US-based jobs.
Another key player in all of this is the Chinese government. Previously, it had reportedly said that it won’t let ByteDance sell off its secret sauce — its proprietary recommendation algorithm — to the US. So from ByteDance’s perspective, a partial sale to Oracle that doesn’t include the prized algorithm could be a win-win situation for both the US and the Chinese government.
But then what was the point of the executive order forcing a sale, even if Trump had no intention of actually enforcing it and even if these national security concerns weren’t serious enough to warrant a full-on sale of TikTok US in the first place.
Oracle’s co-founder Larry Ellison and CEO Safra Catz are rare supporters of Trump among mostly liberal Silicon Valley tech executives (Facebook board member Peter Thiel is another notable exception).
Catz’s and Ellison’s support of Trump hasn’t always gone over well with Oracle’s largely liberal-leaning employees, many of whom are immigrants working on H1B engineering visas and whose legal residency status has been threatened by Trump’s anti-immigration policies.
“I think with Oracle and the relationship they have with the administration, one wonders, ‘Now, what kind of a level playing field was this?’” said Chesney. But that’s all speculative, Chesney said, since the terms of the deal are still unknown. It’s also entirely possible that Oracle simply made a higher offer than Microsoft, or laid out better terms.
Chesney also suggested that maybe ByteDance viewed Oracle as the most likely company to appease not just the US government but the Chinese government as well.
Even some Oracle employees — admittedly ones who disapprove of their company leaders’ ties to the Trump administration — are scrutinizing the TikTok deal. Employees on Monday had not heard anything internally from Oracle leadership as of midday and were hunting around for details.
One employee in a meeting on Monday commented that they worried about their ability to recruit their friends to the company if they think Oracle “is complicit in the corruption” of the Trump administration, according to an internal Slack message seen by Recode that relayed the comment.
“I see this as kissing Trump’s ass and damaging Oracle even further in the developer community, giving them more of a reason to hate us,” said one employee who spoke on the condition of anonymity due to fear of losing their job for publicly criticizing the company.
Another said many colleagues “have a gross taste in their mouth about the whole process,” because of the Trump administration’s “role in all this and the perceived closeness of Larry and Safra to Trump. Just feels to us like that’s what got the business.” But ultimately, this employee said, a TikTok deal could be a good business play for the company.
“As someone who has stock, I’m not hating that part of it right now,” said the employee.
But the manner in which Trump has gone about forcing this TikTok deal — issuing unexpected and confusing executive orders, making contradictory statements to the press, openly suggesting that TikTok should essentially bribe the US government to sweeten the deal, and now considering a deal with terms that Trump initially dismissed until a similar offer was put forward by business leaders who have supported him in the past — has raised troubling concerns with civil liberties advocates and political analysts about the president’s exertion of authority and the free market in the US.
TikTok is also a wildly popular consumer app with 100 million US users, so its fans are left fretting over whether the US government might end up actually shutting TikTok down.
For users, probably not much will change if Trump approves the bid from Oracle, as the data company manages data on the back end and shouldn’t change how the TikTok app actually looks or feels to users.
There are concerns about how Oracle will use this data, and whether it would use it to inform its other operations. But given all the twists and turns that have led to this politically complicated deal, exactly what’s next in the TikTok-Trump saga at this point is anyone’s guess.
Theodore Schleifer contributed reporting to this article.
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TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
