Microsoft says it is ‘prepared to explore purchase of TikTok’ in the US after its CEO spoke to Trump
Donald Trump has reportedly told Microsoft’s CEO he ‘may allow’ the company to buy TikTok in the United States – but only if the app is completely separated from Beijing.
Microsoft Corp said on Sunday that it would continue discussions to acquire the popular short-video app from Chinese internet giant ByteDance. The president had threatened to ban it as early as Saturday.
The company made the statement following a conversation between its CEO Satya Nadella and Trump. It said it would ensure that all private data of TikTok’s American users is transferred to and remains in the United States.
Over the last several months, U.S. officials have repeatedly said TikTok under its current Chinese parent company, Beijing-based software firm ByteDance, poses a national risk because of the personal data it handles. The White House did not immediately comment on the Microsoft statement.
‘Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury,’ Microsoft said in a statement.
The company added that there was no certainty a deal, which could be worth billions of dollars, would be reached but that it was aiming to conclude the negotiations by September 15.
ByteDance was previously seeking to keep a minority stake in the U.S. business of TikTok, a proposal which the White House had rejected. Under the new proposed deal, ByteDance would exit completely and Microsoft Corp would take over TikTok in the United States, sources said Saturday.
Donald Trump, pictured Saturday, had threatened to ban TikTok in the US. Microsoft confirmed Sunday it is in talks with Chinese company ByteDance to acquire the U.S. arm of its popular video app TikTok and has discussed with President Donald Trump his concerns about security and censorship surrounding such an acquisition
Trump and CEO Satya Nadella, pictured, have spoken, the company said, and Microsoft was prepared to continue exploring the purchase of TikTok’s U.S. operations after their chat
In a statement Sunday Microsoft said: ‘Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States.
It adds: ‘The two companies have provided notice of their intent to explore a preliminary proposal that would involve a purchase of the TikTok service in the United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets.
‘Among other measures, Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States. Microsoft appreciates the U.S. Government’s and President Trump’s personal involvement as it continues to develop strong security protections for the country.’
Axios reports the president is said to support the deal if there’s ‘complete separation’ from Beijing.
TikTok’s U.S. general manager, Vanessa Pappas, said Saturday: ‘We’re not planning on going anywhere’
TikTok’s U.S. general manager, Vanessa Pappas, said Saturday: ‘We’re not planning on going anywhere. When it comes to safety and security we’re building the safest app because it’s the right thing to do.’
‘We are so proud of all the various communities who call TikTok home,’ Pappas said, urging the app’s millions of users to ‘stand for TikTok.’
Pappas claimed that the app employs 15,000 people in America, and plans to add an additional 10,000 jobs in the coming years.
Secretary of State Mike Pompeo said earlier on Sunday that the president will take action shortly on Chinese software companies that are feeding data directly to the Beijing government, posing a risk to U.S. national security.
CAN TRUMP BAN TIKTOK?
Earlier Sunday, Secretary of State Mike Pompeo again raised the administration’s warnings about social media platform.
‘These Chinese software companies doing business in the United States, whether it’s TikTok or WeChat — there are countless more … are feeding data directly to the Chinese Communist Party, their national security apparatus,’ Pompeo said on Fox News Channel’s ‘Sunday Morning Futures.’
‘Could be their facial recognition patterns. It could be information about their residence, their phone numbers, their friends, who they’re connected to. Those — those are the issues that President Trump has made clear we’re going to take care of,’ Pompeo said.
A federal committee has been reviewing whether Trump could ban TikTok in the U.S. Its members agree that TikTok cannot remain in the U.S. in its current form because it ‘risks sending back information on 100 million Americans,’ Treasury Secretary Steven Mnuchin said.
‘We all agree there has to be a change … everybody agrees it can’t exist as it does,’ Mnuchin said Sunday on ABC’s ‘This Week.’
‘President Trump has said ‘enough’ and we’re going to fix it and so he will take action in the coming days with respect to a broad array of national security risks that are presented by software connected to the Chinese Communist Party,’ Pompeo said on Fox News Channel’s ‘Sunday Morning Futures.’
‘They’re true privacy issues for the American people and for a long time, a long time the United States just said ‘well goodness if we’re having fun with it, or if a company can make money off of it, we’re going to permit that to happen,’ Pompeo said Sunday.
ByteDance said it was willing to divest the U.S. operations of TikTok to Microsoft in a bid to make a deal with the White House, two people familiar with the matter had told Reuters on Saturday.
The Microsoft offer has gained some support from allies of the president, including Republican Senator Lindsey Graham.
The senator on Saturday defended the president’s decision to take action against the popular video-sharing app, which officials claim poses a national security risk because of the personal data it handles.
Graham however, said he was in favor of an American company acquiring TikTok’s U.S. operations, rather than banning the app completely.
‘To fans and users of#TikTok. I understand your concerns. However President Trump is right to want to make sure that the Chinese Communist Party doesn’t own TikTok and most importantly – all of your private data,’ the senator tweeted.
‘What’s the right answer? Have an American company like Microsoft take over TikTok. Win-win. Keeps competition alive and data out of the hands of the Chinese Communist Party.’
In a separate interview on Sunday, Treasury Secretary Steven Mnuchin said the Committee on Foreign Investment in the United States, which reviews the national security implications of foreign business deals, is looking at the matter.
Over the last several months, U.S. officials have repeatedly said TikTok under its current Chinese parent company, Beijing-based software firm ByteDance, poses a national risk because of the personal data it handles
WHAT DOES MICROSOFT STAND TO GAIN FROM BUYING THE US ARM OF TIKTOK?
TikTok’s catchy videos and ease of use has made it popular, and it says it has tens of millions of users in the U.S. and hundreds of millions globally.
Its parent company, ByteDance acquired Shanghai-based video app Musical.ly in a $1 billion deal in 2017 and relaunched it as TikTok the following year.
In its statement, $1.5 trillion company Microsoft said it may invite other American investors to participate on a minority basis in the purchase of TikTok. Financial terms were undisclosed.
ByteDance was valued at as much as $140 billion earlier this year.
Any deal with Microsoft to buy TikTok could be worth billions of dollars. It could also expose the company, which already owns Xbox, LinkedIn and Skype, to tech savvy teens.
HOW DOES TIKTOK WORK?
- Users post videos of themselves and broadcast them on the app
- Anyone can find these videos and post comments on them; it also allows you to message that person privately
- Some of the most popular videos are watched more than 10 million times
- Each TikTok video is generally 15 to 60 seconds long
- The videos are typically set to music, often showing the user dancing, doing a trick, or lip-syncing
The number of American users has been estimated to be as high as 80 million a month – although because the company is not publicly traded, the estimate by outside analysts is impossible to verify.
The platform took the world by storm in 2017, which allows users to create original videos that are shared in the app for millions to see.
The move comes after Joe Biden’s presidential campaign banned staffers from using the Chinese video sharing app, citing security and privacy concerns.
In a memo on Monday, Biden’s general counsel, Dana Remus, ordered staff members to delete TikTok from both their personal and work phones, and to ‘refrain from downloading and using TikTok,’ according to Bloomberg.
Earlier this week TikTok pushed back at what it called ‘maligning attacks’ that call attention to the video app’s Chinese connections – a coded reference to the inquiry.
TikTok CEO Kevin Mayer said the attacks were ‘disguised as patriotism and designed to put an end to our very presence in the U.S.’
‘We are not political, we do not accept political advertising and have no agenda — our only objective is to remain a vibrant, dynamic platform for everyone to enjoy,’ Mayer said.
‘TikTok has become the latest target, but we are not the enemy.’
As relations between the United States and China deteriorate over trade, Hong Kong’s autonomy, cyber security and the spread of the novel coronavirus, TikTok has emerged as a flashpoint in the dispute between the world’s two largest economies.
ByteDance has been considering a range of options for TikTok amid U.S. pressure to relinquish control of the app, which allows users to create short videos with special effects and has become wildly popular with U.S. teenagers.
ByteDance acquired Shanghai-based video app Musical.ly in a $1 billion deal in 2017 and relaunched it as TikTok the following year.
ByteDance did not seek approval for the acquisition from the Committee on Foreign Investment in the United States (CFIUS), which reviews deals for potential national security risks. Reuters reported last year that CFIUS had opened an investigation into TikTok.
Earlier this year, Chinese gaming company Beijing Kunlun Tech Co Ltd sold Grindr LLC, a popular gay dating app it bought in 2016, for $620 million after being ordered by CFIUS to divest.
In 2018, CFIUS forced China’s Ant Financial to scrap plans to buy MoneyGram International Inc over concerns about the safety of data that could identify U.S. citizens.
ByteDance was valued at as much as $140 billion earlier this year when one of its shareholders, Cheetah Mobile, sold a small stake in a private deal, Reuters has reported. The startup’s investors include Japan’s SoftBank Group Corp.
The bulk of ByteDance’s revenue comes from advertising on apps under its Chinese operations including Douyin – a Chinese version of TikTok – and news aggregator app Jinri Toutiao, as well as video-streaming app Xigua and Pipixia, an app for jokes and humorous videos.
Secretary of State Mike Pompeo said on Sunday that the president will take action shortly on Chinese software companies that are feeding data directly to the Beijing government, posing a risk to U.S. national security