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Oracle warns it will stop hosting TikTok user data after the ban goes into effect

Market IntelMonday, Dec 16, 2024 6:51 am ET

1min read

After a US appeals court dismissed TikTok's lawsuit against the "for sale or banned" law on December 6, the Chinese-owned short video platform is facing an increasingly bleak future in the US. As the effective date of the law approaches, TikTok's key technology partner, cloud service giant Oracle, said it would stop its cooperation with TikTok if the ban takes effect as scheduled.

Ken Glueck, executive vice president of Oracle, recently said, "The law stipulates that we will no longer be able to provide cloud services after January 19, 2025. Regardless of the law, we will comply. Now we have to move forward."

Glueck pointed out that TikTok's future in the US is still uncertain. Congress may amend the law, and Biden may extend the ban before his term ends. Even the Supreme Court may issue a stay order to prevent the ban law from taking effect during TikTok's appeal. However, Oracle still decided to comply with the ban law despite these uncertainties.

"We are just a supplier," Glueck said.

Forbes reported: TikTok's ban will hurt Oracle, Amazon, Microsoft and other cloud service companies.

For TikTok, which is in trouble, Oracle's "betrayal" is undoubtedly a blow. According to the "for sale or banned" law passed by the US Congress in April, any company in the US will not be allowed to provide internet hosting services for TikTok or its parent company ByteDance after January 19, 2025. This means that the TikTok application will no longer be able to distribute content, maintain or update, effectively equivalent to being banned.

Companies that violate the law will face huge fines, with the amount calculated based on the number of TikTok users who continue to use the app after January 19 multiplied by $5,000. According to the current data that TikTok has 170 million active users in the US, the fine amount may reach hundreds of billions or even trillions of dollars.

After Oracle's public statement, the US House of Representatives' Select Committee on China immediately sent letters to Apple and Google, urging the two companies to be prepared to remove TikTok from their US app stores on January 19.

The "for sale or banned" law also prohibits US companies from cooperating with any ByteDance app or service, except for Oracle. TikTok and ByteDance's partners in the US will also face the threat of huge fines. As of now, no other cooperation companies have commented on TikTok's ban.

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