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Photo: Bloomberg
Photo: Bloomberg

Oracle-TikTok deal may set template

  • A licensing deal may help TikTok convince India that its data sovereignty is protected
  • Experts say a deal in the US will lead to ‘significant oversight’ by not just US authorities but also the Chinese

The deal struck between Oracle and TikTok’s US arm may set the blueprint for how things might proceed in India, though the Indian government has insisted that the developments in the US won’t influence the short-video platform’s future here, experts said.

“Having a licensing deal is the best compromise TikTok could have done," said Arindrajit Basu, senior policy officer, Center for Internet and Society (CIS). “Given the fact that the geopolitical tension will continue for some time at least, it is infeasible to have an app that is being run by a Chinese firm and is so widely available in India," he added.

A licensing agreement in India could help TikTok convince the Indian government that the country’s data sovereignty is protected. “Oracle, or whichever the company they partner with, will guarantee that the user data will not go to China. That is one way of protecting India from Chinese surveillance," Basu said.

According to Akash Karmakar, a partner at the Law Offices of Panag & Babu, who advises several global app firms, the sale of TikTok’s US operations is being “closely watched in light of the tech-transfer components of the transaction now being silently moulded by the Chinese government’s revised export-control rules".

Karmakar said a deal in the US will lead to “significant oversight" by not just US authorities but also the Chinese. “With the ability to license or transfer technology now being regulated by China, it will certainly result in certain tweaks to deal restructurings and result in valuation adjustments on the basis of what data sharing and source code sharing or licensing is possible in light of the new export-control rules, which have an effect similar to localizing proprietary Chinese tech without imposing data localization regulations," he added.

US President Donald Trump had earlier issued an executive order, asking TikTok to sell its US operations to an American company within 45 days. The deadline for the same was supposed to end on 20 September.

Sanchit Vir Gogia, the founder of Greyhound Research, said in a blog post that TikTok’s US data being hosted on the US company’s cloud servers is an “obvious outcome" of the partnership.

Tanu Banerjee, a partner at Indus Law, said the partnership could set a template for India, but it will depend on several factors, including the manner in which user data is proposed to be managed under such a partnership, whether the proposed arrangement addresses the data privacy and security concerns raised by the government of India and the current geopolitical scenario.

To be sure, India may reject a licensing arrangement.

“Ultimately, India’s concerns are that the data should not go outside our territorial boundaries to China," said cyber law expert Pavan Duggal.

“I don’t think the licensing regime will fly in India. The full details of the deal will have to be looked at. Ultimately, we will have to see where the data is going, who has final control and whether the technology is used in a manner to facilitate backdoors," he added.

Duggal said in licensing deals, the licencee is “at best" a representative of the principal. As a result, data operations being carried out by a licencee would still mean that a Chinese firm is involved and “is tantamount to Indian data going back to China for processing".

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