U.S.-China TikTok Deal: Navigating Ownership and Algorithm Challenges

A framework agreement was announced between the U.S. and China to shift TikTok's ownership to U.S. control. Key issues include compliance with a 2024 law and whether China's ByteDance will transfer the app's algorithm. Congressional approval may be required, and concerns over Chinese ownership persist.

The U.S. and China have announced a framework agreement aimed at transitioning the ownership of the popular short-video app TikTok to U.S. control. The deal, revealed in Madrid, leaves several unanswered questions, notably whether China will allow the transfer of TikTok's recommendation algorithm, a critical asset driving its success.

In the wake of 2020's sale push by the Trump administration, China adjusted its export control rules, impacting the potential transfer of the algorithm. Congressional approval might be needed for any deal, due to concerns over data privacy and potential influence by Beijing through the app. Misgivings about the legal authority to extend deadlines for compliance have emerged.

U.S. investors are speculated to dominate ownership post-divestiture, but details remain vague. The previous attempt at a deal hit a roadblock when China disapproved following tariff hikes by the U.S. The ongoing debate centers on whether ByteDance's current American investors will maintain ties with China.

(With inputs from agencies.)