Confirmed TikTok Agreement in the United States: Ongoing Issues and Consequences

After a year marked by uncertainty, TikTok has officially signed an agreement that ends the threat of a ban in the United States. On January 22, TikTok announced the creation of TikTok USDS Joint Venture LLC, formalizing an agreement between the U.S. and Chinese governments. However, despite this major advancement, several crucial questions remain, particularly regarding governance, the algorithm, and the impact on users and brands.

Implementation Still Unclear

Although the new agreement is confirmed, the details regarding its implementation remain uncertain. TikTok has begun informing its American users with a new privacy policy, but the specific terms of the separation process are not yet clear. Questions persist: Will it be a gradual transition? Will there be interruptions or technical issues during this phase? At this stage, the only certainty is that this transformation is underway, or perhaps already initiated.

An Algorithmic Shift to Watch

With this agreement, TikTok USDS will need to adapt its algorithm to use exclusively American data. According to Kelsey Chickering, a principal analyst at Forrester, this could significantly influence the trends that appear in American users' feeds. "This is important because the algorithm is the heart of the app's addictive experience," she stated. These adjustments could enhance local engagement, but they could also alter the platform's global cultural value.

An Opportunity for Competitors?

TikTok's success largely relies on its unique algorithm, which its rivals have failed to replicate. However, if the algorithm evolves under this new model, it could create an opening for competing platforms. The changes could affect not only TikTok's performance but also its technological edge in the market.

Risks for Users and Brands

The adaptation of the algorithm by an investor-led organization presents an unprecedented challenge. This governance, entrusted to a board of directors, raises questions about real-time technical management. Lucy Robertson, global brand director at Buttermilk, emphasized: "If new infrastructures or algorithms are introduced, it raises questions about the preparedness of brands and users." Potential disruptions could include service interruptions, bugs, or changes in features, requiring rapid adjustments.

Consequences for Creators and Advertisers

While American creators may benefit from increased prioritization of their content, international creators could be penalized if their reach in the U.S. diminishes. Shamsul Chowdhury, a paid social media expert, pointed out that the new conditions could complicate matters for brands: "This could be a hindrance if contracts are restrictive or too burdensome for brands." This complexity could also influence how advertisers, particularly international brands, interact with the platform.

Ongoing Legislative Scrutiny Possible

Despite this historic agreement, TikTok is not entirely free from potential legal scrutiny. Minda Smiley, a senior analyst at eMarketer, noted: "Some observers have expressed concerns that the current agreement will not actually resolve the issues at the root of the legislation. [...] I think TikTok has a tough year ahead of it, in more ways than one."

A Precedent for Other International Apps?

This agreement could also serve as a model for addressing potential concerns regarding other international apps in the future, particularly in the context of rising geopolitical tensions. In addition to TikTok, the joint venture also covers other products from ByteDance, such as CapCut and Lemon8, but the framework established could extend to other tech companies in the future.

Key Points of the Agreement

TikTok's official announcement revealed several important details about the structure and objectives of this new entity:

• American User Data: It will be stored in Oracle cloud in the United States.
• Security: A rigorous privacy and cybersecurity program will be implemented and audited by independent experts.
• Algorithm: The algorithm will be adapted using exclusively American user data in Oracle's secure environment.
• Control: The joint venture will have decision-making authority over trust, security, and content moderation policies.
• Global Interoperability: American creators and brands will continue to operate on an international scale.

A New Direction and Investment Structure

Adam Presser, former head of operations at TikTok, will lead TikTok USDS as CEO. The leadership team also includes several influential figures, including Shou Chew, TikTok's global CEO, as well as other personalities from the tech and finance sectors.

Financially, ByteDance retains a stake just below 20%, while three main investors each hold 15% shares. The remaining 34% is distributed among various investors, such as Vastmere Strategic Investments and Alpha Wave Partners.

Conclusion

Despite the end of immediate threats of a ban, TikTok's future in the United States remains marked by uncertainty and challenges. Questions linger about technical implementation, cultural impacts, and the sustainability of relationships with U.S. regulators. This chapter could redefine not only TikTok but also future relationships between international technologies and the American market.

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