Microsoft continues TikTok talks
Print Edition
MICROSOFT announced on Sunday it would continue talks to acquire the US operations of popular video-sharing app TikTok, after meeting with President Donald Trump who seemingly backed off his earlier threats to ban the Chinese-owned platform.
In a statement, Microsoft said Microsoft and ByteDance, TikTok’s Chinese parent company, have provided notice of their intent to explore a deal resulting in Microsoft owning and operating the TikTok service in the US, Canada, Australia and New Zealand.
The company said it expects those talks to conclude by September 15.
Trump said on Friday that he would soon ban TikTok in the United States. Trump and CEO Satya Nadella have spoken, the company said, and Microsoft was prepared to continue exploring the purchase of TikTok’s US operations after their conversation.
“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 statement said.
The White House did not immediately comment on the Microsoft statement. People familiar with the matter said Trump only agreed to allow the acquisition talks if Microsoft could secure a deal in 45 days.
Trump changed his mind following pressure from some of his advisers, one of the sources said. Banning TikTok would alienate many of its young users ahead of the US presidential election in November, and would likely trigger a wave of legal challenges.
The negotiations between ByteDance and Microsoft will be overseen by the Committee on Foreign Investment in the United States, a US government panel that has the right to block any agreement, according to the sources.
TikTok, which boasts 100 million US users, has been a source of national security and censorship concerns for the Trump administration.
In its statement, Microsoft said it may invite other American investors to participate on a minority basis in the purchase of TikTok. Financial terms were undisclosed.
TikTok’s US user data is stored in the US, with strict controls on employee access, and its biggest investors come from the US, the company said earlier on Sunday.
It is not clear how much Microsoft could pay for TikTok. Reuters reported last week that ByteDance’s valuation expectations for the app exceeded US$50 billion, although US pressure to divest it could lower that price tag.
ByteDance has not publicly confirmed the sale talks. But in an internal letter to staff yesterday, the company’s founder and CEO Zhang Yiming said the firm had started talks with a tech company it did not identify to clear the way “for us to continue offering the TikTok app in the US.”
“In the current environment, we faced the real possibility of a forced sale of TikTok’s US business ... or an executive order banning the app,” Zhang said.
“While we encounter mounting complexities across the geopolitical landscape and significant external pressure, our response teams have been working around-the-clock and giving up their weekends over the past few weeks to ensure the best possible outcome.”
Zhang also said ByteDance did not agree with the stance taken by CFIUS that it must fully divest TikTok’s US operations.
“We disagree with this CFIUS conclusion,” the letter said, adding, “We have always been committed to ensuring user data security, as well as the platform neutrality and transparency.”
In a statement issued late on Sunday that did not mention TikTok, ByteDance said it is committed to becoming a global company despite facing “complex and unimaginable difficulties” in going global, including “the tense international political environment, collision and conflict of different cultures and plagiarism and smears from competitor Facebook.”
TikTok has attracted criticism from Facebook CEO Mark Zuckerberg, who last year accused the app of censorship. TikTok has denied the claim.
Facebook did not immediately respond to a request for comment.
US Secretary of State Mike Pompeo said on Fox News the president would “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.”
In response, China’s foreign ministry spokesman Wang Wenbin said the US has been “stretching the concept of national security”, presuming that companies are guilty without evidence.
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