Billionaire Frank McCourt Investigates Legality of TikTok Deal

Billionaire investor Frank McCourt, who previously bid to acquire TikTok, is now examining the legality of a proposed deal that would allow a majority-American investor group to purchase the app’s U.S. assets. The agreement, brokered by the White House, aims to address national security concerns surrounding TikTok, which is owned by the China-based company ByteDance.

In a recent interview with CNN’s Terms of Service podcast, McCourt stated, “It’s too early to say” whether he will seek to join the ownership group or challenge the deal in court if it appears unlawful. He emphasized the need for transparency regarding the agreement, believing the American public deserves more information. “I’ve asked and engaged some really smart people to analyze the deal… because there are still missing pieces with what this all means,” he added.

Legal and Security Implications

McCourt’s team is investigating whether the proposed transaction adheres to the sale-or-ban law enacted last year, which mandates that TikTok must either be sold by ByteDance or face a ban in the United States. The law was designed to mitigate concerns about potential risks to U.S. user data and national security.

This scrutiny is part of an ongoing saga that has seen enforcement of the sale-or-ban law delayed several times. The app has become a focal point in U.S.-China relations, as lawmakers and officials express apprehensions about data privacy. McCourt, along with investor Kevin O’Leary and Alexis Ohanian, initially sought to buy TikTok without its algorithm, intending to rebuild it using technology from McCourt’s nonprofit initiative, Project Liberty. This setup aimed to empower users with greater control over their personal data.

As the White House advances a different proposal, which is expected to include firms like Oracle, private equity firm Silver Lake, and Michael Dell, McCourt remains focused on his goal of ensuring data protection. He believes it is essential to create technology that allows individuals to manage their data more effectively, especially in an era dominated by artificial intelligence.

Future Plans and Data Ownership

In light of the ongoing negotiations surrounding TikTok, McCourt’s Project Liberty is contemplating leveraging its technology to develop a personalized AI agent. This tool would enable users to dictate how and when their data is shared online. McCourt explained, “That agent then is operating on your instructions… You just say, ‘this is what I want to achieve, this is what I’m willing to share (and) not share.’”

He provided an example of how a user could choose to receive advertisements for snow boots after discussing a trip to the mountains while opting not to share sensitive health information following a conversation about a recent doctor’s visit. Furthermore, McCourt envisions a model where users could benefit financially when their data is utilized to generate profit for tech platforms.

“I believe there will still be plenty of economic opportunity for firms who get on board with my vision for the internet,” he stated. This approach operates on the premise of a data-sharing economy, where platforms profit while individuals also gain from the value their data provides.

On September 26, 2023, Donald Trump signed an executive order confirming that the agreement constitutes a “qualified divestiture” as mandated by the sale-or-ban law. This procedural step is crucial for moving forward with the sale of TikTok, but significant details remain unclear. This includes how the new ownership group will license the TikTok algorithm from ByteDance while addressing ongoing national security concerns.

As McCourt continues to analyze the legality of the TikTok agreement, he reiterated the importance of upholding the rule of law in the United States. “At the end of the day, what’s important to me… is that the rule of law in this country still means something,” he concluded.

News outlets, including CNN, have sought comments from the White House regarding McCourt’s remarks, but no official response has been provided. The unfolding developments around TikTok and its ownership continue to attract attention, reflecting the complex interplay of technology, privacy, and international relations.