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UPDATE 4-Trump raises questions about TikTok-Oracle deal if ByteDance ties remain

17 Sep 2020 / 08:17 H.

    (Recasts with Trump comments)

    By Alexandra Alper

    WASHINGTON, Sept 16 (Reuters) - U.S. President Donald Trump raised questions on Wednesday about plans by China's ByteDance to keep a majority stake in the U.S. operations of popular social media platform TikTok after six Republican lawmakers urged him to reject the proposal.

    Trump said he would be briefed on Thursday about a proposal that calls for Oracle Corp to become a "trusted technology provider" for TikTok's U.S. operations, but he did not favor the idea of having the Chinese firm retain control.

    Senator Marco Rubio and five other Republican senators on Wednesday urged the administration to reject the deal as long as ties remained to Chinese owner ByteDance, and suggested the president could block the proposal.

    Trump had previously threatened to ban the app unless its U.S. operations were sold to a U.S. company and the U.S. government received a share of the proceeds.

    "Conceptually, I can tell you that I don't like that," Trump told a news conference when asked about a reported proposal to give Oracle only a minority share. "I'm not prepared to sign off on anything. They're going to be reporting to me tomorrow morning and I'll let you know."

    Rubio, the first senator to call on the administration to investigate TikTok over censorship concerns, cited "serious questions" remained about Oracle's role, the technology it would provide to ByteDance, and the future of the application's algorithm in a letter to Trump dated Wednesday.

    "We remain opposed to any deal that would allow China-based or controlled entities to retain, control or modify the code or algorithms that operate any U.S.-based version of TikTok," he wrote.

    "We are heartened that this deal still requires government approval, and if reports indicating this proposed deal will retain links to ByteDance or other Chinese-controlled entities, we strongly urge the administration to reject such a proposal on national security grounds," he added.

    Late on Wednesday, Senator Ted Cruz sent a separate letter to Trump arguing that the Oracle ByteDance deal "failed to meet the intent of the president's executive orders" and "raises serious national security concerns."

    White House press secretary Kayleigh McEnany earlier told reporters a decision would be made "in short order." White House economic adviser Larry Kudlow said security and the ownership question were of paramount concern.

    The Rubio letter, also signed by Senators Thom Tillis, Rick Scott, John Cornyn, Roger Wicker and Dan Sullivan, is part of a growing chorus of lawmakers raising questions about the deal.

    On Monday, Republican Senator Josh Hawley sent a letter to Treasury Secretary Steve Mnuchin, who heads a national security panel reviewing the proposal, calling for the deal to be scuttled, if it does not allow for the "full emancipation of TikTok software from potential Chinese Communist Party control."

    U.S. national security officials fear that ByteDance could provide American user data to the Chinese government. But Trump may not want to alienate 100 million-odd American TikTok users so close to the Nov. 3 elections.

    Trump has also said he is a fan of Oracle's co-founder and Chairman Larry Ellison, one of few tech executives to openly support him.

    Meanwhile, China has updated its export control rules to give it a say over the transfer of technology, such as TikTok's recommendation algorithm, to a foreign buyer. Chinese officials have said ByteDance should not be coerced by the United States into a deal.

    Oracle announced on Monday it was part of a proposal submitted by ByteDance to the U.S. Treasury Department to serve as "trusted technology provider," to ByteDance, providing no further details on the terms of the deal.

    (Reporting by Alexandra Alper; additional reporting by David Shepardson and Andrea Shalal; Editing by Nick Zieminski, Lisa Shumaker and Grant McCool)

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