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Illustration: Aïda Amer/Axios

An agreement between TikTok's Chinese owner ByteDance and Oracle includes a variety of concessions in an effort to make the deal palatable to the Trump administration and security hawks in Congress, according to a source close to the companies.

Driving the news: The deal, in the form of a 20-page term sheet agreed to in principle by the companies, would give Oracle unprecedented access and control over user data as well as other measures designed to ensure that Americans' data is protected, according to the source.

Why it matters: President Trump and U.S. leaders have been calling for a complete sale of the business. While this isn't that, it does create several layers of oversight, including a continuous third-party audit and an independent board approved by the U.S. government.

Details: Among the provisions of the term sheet, per the source:

  • Oracle will have the exclusive ability to oversee all tech operations for TikTok in the U.S.
  • Oracle will review TikTok's source code and related software to ensure there are no backdoors.
  • Oracle will also be able to review all updates to TikTok's software to ensure no adverse changes are made.

TikTok in the U.S. will have its own board, approved by the U.S. government.

  • That board will include a security director — an independent data security expert with national security credentials, so likely a former NSA or CIA official with a high-level security clearance.
  • There will also be a security subcommittee of the board composed of U.S. citizens with the final say on matters related to security and data privacy. It will have veto power over board decisions that go against the company's security commitments.
  • That subcommittee will also be responsible for ensuring compliance with CFIUS and other U.S. agency demands.

A separate entity, TikTok Global, will have its own board and be based in the U.S. It’s that entity in which Oracle, as well as Walmart, will have an ownership stake.

  • TikTok Global will own TikTok's operations around the world, including the U.S. operation, which will have the extra security measures and its own governance.

Instagram co-founder Kevin Systrom is one executive who has been approached about the possibility of leading the new company, according to a report in the New York Times.

The big picture: U.S. security officials and policymakers have regularly asserted that TikTok's popular video-sharing platform poses a risk to U.S. security because the Chinese government could gain access to U.S. user data.

  • TikTok has always insisted that it stores U.S. data outside of the reach of Chinese authorities.
  • Last month President Trump said he would ban the app in the U.S. unless ByteDance agreed to sell it to a U.S. company by mid-September.
  • Last weekend, Microsoft, which had long been seen as the frontrunner to acquire TikTok, said that ByteDance had rejected its bid.
  • Oracle is close to the Trump administration and might be better placed to win approval for a deal, but Wednesday President Trump said that he was "not going to be happy" if the deal left ByteDance as majority owner.

Between the lines: While the deal does not constitute a full sale and likely leaves a substantial chunk of the company in Chinese hands, the source notes this is way more than any other tech company is doing or being asked to do.

Go deeper

Biden transition names first Cabinet nominees

Tony Blinken at the U.S. embassy in Baghdad in 2016. Photo: Pool / The Embassy of the United States of America in Baghdad/Anadolu Agency/Getty Images

President-elect Joe Biden on Monday unveiled his nominations for top national security positions in his administration, tapping former Secretary of State John Kerry as his climate czar and former deputy national security adviser Avril Haines as director of national intelligence.

Why it matters: Haines, if confirmed, would make history as the first woman to oversee the U.S. intelligence community. Biden also plans to nominate Alejandro Mayorkas to become the first Latino secretary of the Department of Homeland Security.

Updated Nov 25, 2020 - Politics & Policy

Trump gives Biden access to presidential intelligence briefings

Photo: Mark Makela/Getty Images

The Trump White House on Tuesday gave President-elect Biden access to daily presidential intelligence briefings, a source familiar with the matter tells Axios.

Why it matters: Trump has refused to share the briefs until now, as he continues to challenge the result of the election and declines to concede. The president's acquiescence comes as another sign that the transition to a Biden administration is taking place.

2 hours ago - World

Iran confirms assassination of top nuclear scientist Mohsen Fakhrizadhe

The Iranian ministry of defense issued a statement on Friday confirming the assassination of Mohsen Fakhrizadhe, an Iranian scientist and the architect behind the Islamic Republic’s military nuclear program.

Why it matters: Fakhrizadhe was the head of the Amad project in the Iranian ministry of defense, which focused on developing a nuclear bomb until 2003.