Why Is Frank McCourt Concerned About the TikTok Deal’s Legality?
Frank McCourt is scrutinizing the legality of the proposed TikTok sale because it potentially contradicts the sale-or-ban law passed by the U.S. Congress in 2024, aimed at eliminating national security threats posed by foreign-owned tech platforms. The current deal, brokered under the Trump administration, would transfer TikTok’s U.S. operations to a consortium of American investors—including Oracle, Silver Lake, Michael Dell, and Lachlan Murdoch—while allowing ByteDance, the China-based parent company, to license its algorithm to the new entity.
This sale structure raises legal and strategic concerns. The law was designed to force a complete separation from ByteDance, but the licensing agreement suggests ByteDance retains influence over the algorithm—the very mechanism that determines how content is distributed and how user data is processed. McCourt, an early TikTok bidder, is investigating whether this arrangement circumvents legislative intent and fails to address national security vulnerabilities, particularly around U.S. user data sovereignty.
Who Is Frank McCourt and Why Did He Want to Buy TikTok?
Frank McCourt is a billionaire real estate mogul and former owner of the Los Angeles Dodgers. He’s also the founder of Project Liberty, a nonprofit focused on rebuilding the internet around user data rights, digital autonomy, and decentralized technologies. McCourt’s interest in TikTok wasn’t just financial—it was ideological.
- Technological Vision: McCourt proposed a TikTok rebuild without its core algorithm, intending to create a privacy-first platform leveraging the open-source DSNP (Decentralized Social Networking Protocol) technology developed by Project Liberty.
- Consortium Partners: His investor group included Kevin O’Leary (Shark Tank) and Alexis Ohanian (Reddit co-founder), with a shared mission to create an alternative to the exploitative data economy controlled by centralized platforms like Meta and ByteDance.
- Focus on Data Sovereignty: Unlike traditional acquirers, McCourt’s bid centered on giving users ownership and control over their data—addressing not just national security, but also digital civil rights.
- Public Benefit Model: The proposal framed TikTok’s transformation as a digital public trust, with revenue-sharing models where users could monetize their own data through transparent opt-in mechanisms.
What Legal and Structural Issues Exist in Trump’s TikTok Deal?
McCourt’s legal inquiry centers on whether the deal meets the explicit requirements of the “Protecting Americans from Foreign Adversary Controlled Applications Act,” passed in 2024.
- Qualified Divestiture Criteria: The law mandates a qualified divestiture, which requires ByteDance to fully relinquish operational control and influence over TikTok’s U.S. business, including the underlying algorithm that governs data collection and content distribution.
- Algorithm Licensing Loophole: ByteDance reportedly intends to license TikTok’s algorithm to the U.S. consortium. This could enable persistent backend control, undermining the law’s intent and leaving room for indirect data access or algorithmic manipulation.
- Opaque Transaction Details: Despite the executive order signed by Trump affirming the deal’s legality, there is minimal public transparency around the licensing terms, data storage frameworks, and algorithmic retraining procedures.
- Security Enforcement Oversight: Oracle is expected to monitor algorithmic behavior post-sale, but critics like McCourt argue this is an insufficient safeguard against deeply embedded security risks within AI-driven content engines.
What Are the National Security and Data Privacy Implications?
The TikTok debate encapsulates the evolving definition of national security in the AI and data economy era. Beyond espionage fears, the deeper issue lies in algorithmic governance and data profiling.
- Behavioral Surveillance Risk: TikTok’s algorithm excels at micro-targeting users, building psychographic profiles that can influence mood, behavior, and even political sentiment. Licensing the same algorithm while claiming independence is a contradiction in terms.
- AI as Strategic Infrastructure: Algorithms now function as infrastructure for digital economies. Allowing a foreign entity to control such infrastructure—even indirectly—could mean ceding strategic ground in AI, content moderation, and narrative control.
- US-China Tech Cold War Context: TikTok sits at the heart of the digital Cold War between the U.S. and China. McCourt’s questions tap into a broader concern: How should democracies regulate, transfer, or nationalize algorithmic systems with far-reaching cultural and economic influence?
- Privacy vs. Monetization Dilemma: McCourt underscores that today’s platforms monetize intimacy—scraping user-generated content, behavioral signals, and private conversations with AI agents, which exacerbates the power imbalance between platforms and individuals.
What Is McCourt’s Project Liberty Planning Next?
McCourt is now shifting his focus from platform acquisition to infrastructure development—doubling down on building tools that empower users to regain control over their digital identities.
- Personal AI Agent Development: Project Liberty is developing a decentralized AI agent that acts as a data gatekeeper, allowing users to dictate who accesses their data, for what purposes, and under what economic terms.
- User-Controlled Data Monetization: The agent could allow users to monetize their data by selectively sharing it with advertisers or services. For instance, users could permit snow boot ads after searching for a ski vacation, while denying health data access after a medical chatbot session.
- Consent-Led AI Interaction Models: Unlike current opaque systems, the AI agent would operate on user-defined rules. Permissions can be revoked or altered in real-time, mimicking real-world consent in digital environments.
- Vision of a Data Sharing Economy: McCourt envisions an internet where value generated from personal data is equitably shared. Platforms would still profit, but so would the individuals powering those platforms with their data and behavior.
How Might McCourt Challenge or Influence the TikTok Sale Going Forward?
While McCourt has not yet declared legal action, he’s building a case for civic and legal scrutiny. His influence may shape regulatory perspectives and investor due diligence across several dimensions:
- Legal Intervention Possibility: If his analysis concludes that the sale violates the sale-or-ban law, McCourt could initiate legal proceedings that delay or complicate final approval.
- Public Policy Engagement: By spotlighting the structural loopholes, McCourt is pushing lawmakers to demand full transparency and enforce stronger compliance mechanisms around digital divestitures.
- Ethical Tech Influence: McCourt’s approach could attract regulators and technologists seeking to define ethical standards for data rights, algorithmic governance, and AI transparency.
- Alternative Tech Movement Growth: Through Project Liberty, McCourt is seeding a parallel internet economy grounded in privacy, user agency, and structural decentralization.
Conclusion
Frank McCourt’s concerns go beyond TikTok—they’re part of a broader movement to redefine digital governance, algorithmic accountability, and data ownership in the age of artificial intelligence. As legal clarity around the TikTok sale remains murky, McCourt’s challenge may catalyze a long-overdue reckoning over who controls the future of the internet—and under what terms.
