TikTok reaches deal for new U.S. joint venture to avoid American ban

In this July 21, 2020 file photo, a man opens social media app 'TikTok' on his cell phone. (AP Photo/Anjum Naveed, File)

WASHINGTON – TikTok’s Chinese owner, ByteDance, finalized a deal on Thursday to set up a majority American-owned joint venture company to avoid a U.S. ban on the popular social media app used by more than 200 million Americans.

The deal is a milestone for the short video app after years of battles that began in August 2020, when U.S. President Donald Trump first tried unsuccessfully to ban the app over national security concerns.

TikTok USDS Joint Venture LLC will secure U.S. user data, apps and the algorithm through data privacy and cybersecurity measures, the company said.

The agreement provides for American and global investors, including cloud computing giant Oracle, private equity group Silver Lake and Abu Dhabi-based MGX, to hold a stake of 80.1 per cent in the new joint venture, while ByteDance will retain 19.9 per cent.

David Shepardson, Reuters