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TikTok agrees to partner with Oracle, not Microsoft, in U.S.

A sign advertising social app TikTok is displayed on August 28 at Yankee Stadium in New York City. Photo by John Angelillo/UPI
A sign advertising social app TikTok is displayed on August 28 at Yankee Stadium in New York City. Photo by John Angelillo/UPI | License Photo

Sept. 14 (UPI) -- U.S. tech company Oracle said Monday it's agreed to a partnership with Chinese video-sharing app TikTok one day before it would have been banned in the United States under threat from the Trump administration.

Oracle said in a statement it will be a "trusted technology provider" for TikTok operations in the United States.

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The statement followed remarks from Treasury Secretary Steve Mnuchin that said regulators will review the deal this week.

"We'll need to make sure that ... Americans' data is secure, that the phones are secure and we'll be looking to have discussions with Oracle over the next few days with our technical teams," he told CNBC.

It wasn't immediately clear what form the partnership will take or which parts of TikTok technology will be transferred to Oracle. Earlier reports indicated the deal won't be an outright sale.

President Donald Trump last month said the app would be banned nationwide on Sept. 15 if TikTok didn't agree to a U.S. sale. The administration had said the app is a security threat because user data could be accessed by the Chinese government.

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TikTok owner ByteDance, however, said it stores user data outside of China -- in the United States and Singapore -- and has erected software barriers ensuring that TikTok stores U.S. data separately.

TikTok had challenged the ban in a lawsuit as a violation of the Fifth Amendment of the U.S. Constitution, which guarantees due process.

Analysts say the deal with Oracle could set a precedent for how Chinese companies can operate in the United States in an era of increased tensions and heightened security concerns.

Microsoft, which had hoped to acquire TikTok, acknowledged in a blog post Sunday that it won't be buying the company.

"ByteDance let us know today they would not be selling TikTok's US operations to Microsoft," it stated. "We are confident our proposal would have been good for TikTok's users, while protecting national security interests.

"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."

Shares of Oracle rose by as much as 9% after the market opened Monday.

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