Microsoft negotiates the purchase of TikTok business in the US
Microsoft is in advanced negotiations to buy the US operations of TikTok, the popular Chinese-owned video app that has been causing concern about national security and censorship, according to a person familiar with the discussions.
The person spoke on condition of anonymity given the delicacy of the negotiations.
The potential deal would be an achievement for both companies, making Microsoft a strong player on the social media stage and providing relief to TikTok and its parent company ByteDance, a target of President Donald Trump.
Trump said Friday that he would take steps as soon as Saturday to ban TikTok in the United States. The statements Trump made on Friday aboard Air Force One came after the release of reports that the U.S. government was planning to order the Chinese company ByteDance to sell TikTok.
As far as TikTok is concerned, we are banning it in the United States, Trump told reporters on Friday on Air Force One during his return from Florida.
Trump said he could use emergency economic powers or an executive order to apply the measure, and insisted that he has the authority.
It will be signed tomorrow, he added.
Microsoft declined to comment.
The Bloomberg News and Wall Street Journal reports noted, citing anonymous sources, that the government may soon announce its decision to order ByteDance to divest TikTok.
There have also been reports of tech giants and US financial firms interested in buying or investing in TikTok as the White House turns its attention to the app. The New York Times and Fox Business, citing an unidentified source, were the first to post Friday that Microsoft was in talks to acquire the platform.
"Although we did not comment on rumors or speculation, we are confident in TikTok's long-term success," the company said in a statement on Friday.
On Saturday, TikTok posted a short video in which its general manager in the United States, Vanessa Pappas, underlines that "we do not plan to go anywhere."
ByteDance launched TikTok in 2017. It then purchased Musical.ly, a popular video service among teens in the United States and Europe, and merged them. Chinese users have an identical service, Douyin.
TikTok's funny videos and ease of use has made it immensely popular, and American tech giants like Facebook and Snapchat see it as a competitive threat. The platform indicated that it has tens of millions of users in the United States and hundreds of millions worldwide.
But its Chinese capital has raised concerns about the censorship of the videos, including critics of the Beijing government, and the possibility that it will share its users' data with the Chinese authorities.
TikTok maintains that it does not censor videos on sensitive issues for China and that the Beijing executive would not have access to the data of its users in the United States even if it requested it. The firm has hired a US chief executive, a former Disney boss, in an attempt to distance himself from the ownership issue.
US Homeland Security officials have been reviewing the Musical.ly acquisition in recent months, while the military has prohibited its employees from installing the app on government cell phones. Secretary of State Mike Pompeo said earlier this month that Washington was considering banning TikTok.
These national security concerns resemble a broader US offensive to curb Chinese companies, including telecoms providers Huawei and ZTE. The Trump administration has ordered the country to stop using equipment from these providers in U.S. networks. Washington has also tried to convince its allies to stay away from Huawei out of concern that the Chinese government has access to its data, something the group has denied.
The Trump administration has already intervened in the past to block or dissolve deals over national security issues, including preventing a $ 117 billion offer from Singapore's Broadcom by chipmaker Qualcomm in 2018, in an effort to help retain the country's leadership in the telecommunications space. In addition, he asked the Chinese Beijing Kunlun Tech Co. to get rid of Grindr, a gay dating app, which he bought in 2016.
Other nations have also taken action against TikTok. This month, India banned dozens of Chinese apps, including TikTok, citing privacy concerns at a time of great tension between New Delhi and Beijing.