TikTok Restructures US Operations to Comply with Security Concerns

TikTok finalized a deal to restructure its US operations in 2026, establishing a new majority-American owned entity, TikTok USDS Joint Venture LLC, to address national security concerns and avert a potential ban, according to multiple news sources. The agreement, reached after pressure from the US government, involves licensing its algorithm to American owners and training it solely on US user data.

The restructuring significantly reduces ByteDance's ownership to under 20%, with non-Chinese investors holding 80% ownership, according to the NYT Technology. Oracle, a major cloud computing company, secured a leading 15% stake, gaining influence over TikTok's content moderation and recommendation algorithm, raising questions about data privacy and algorithmic bias. Oracle will oversee US user data and the content recommendation algorithm, according to BBC Technology.

The deal allows the app to continue operating in the US, ensuring its continued availability on app stores, according to TechCrunch. The 200 million users in the United States will be able to keep their existing TikTok app, a spokeswoman for the new venture said, according to NYT Technology. There won't be any need to download a new version.

However, the impact of the algorithm change on its 200 million American users is still uncertain, according to BBC Technology. The deal faces scrutiny from lawmakers concerned about potential political influence and a lack of transparency, according to BBC Technology. Some Democrats are concerned about potential political influence and a lack of transparency, according to BBC Technology.

The updated U.S. terms and conditions now allow for more precise location tracking and targeted advertising, reflecting a broader trend in social media data collection, according to NYT Business. TikTok's new US venture is updating its privacy policy to potentially collect precise location data from American users, a shift from its previous collection of approximate location information, according to BBC World. This change will allow for more granular tracking, though the company states that users can disable location services and that precise location sharing will be optional and off by default in the US.

TikTok users are also concerned about the app's updated privacy policy, which mentions the potential collection of sensitive data like immigration status, but this disclosure is not new and is primarily for compliance with state privacy laws, according to TechCrunch. The policy update reflects standard legal practices for data collection transparency and is similar to disclosures in other social media platforms, despite user fears fueled by the current political climate.

Facing increasing global pressure regarding children's access to social media, TikTok is implementing a new age-detection system in Europe, utilizing profile data and content analysis to identify underage users, reflecting a growing trend of governments worldwide seeking stricter age-based regulations on social media platforms, as seen in Australia's ban for children under 16, according to Wired.