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Business & Technology

After Trump Threat, Microsoft Confirms It's in Talks to Buy TikTok

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After Trump Threat, Microsoft Confirms It's in Talks to Buy TikTok

2020-08-03 22:22:56

By Laura Tucker, Staff writer; Image; Facebook showing TikTok logo (Image source: Public domain)

Donald Trump is continuing to put pressure on TikTok. He is now suggesting that he won't ban its use in the United States if Microsoft buys the social network. Microsoft confirmed on Sunday that it would continue talks with the app from China.

Microsoft explained in a blog post that chief executive Satya Nadella and Trump had spoken about TikTok. It said the company is committed to handling Trump's concerns about TikTok. He had said he didn't approve of this potential acquisition and that he planned to ban the app.

According to people familiar with the talks, another possibility Trump has been considering is forcing the short-video app's parent company, ByteDance, to divest in TikTok in the United States because of the security concerns associated with the app.

Microsoft confirmed it would "move quickly" in its negotiations with ByteDance and that it has given the U.S. government notice of the possible acquisition. It's the first time the company has confirmed that it's been discussing the possibility of buying TikTok.

"This new structure would build on the experience TikTok users currently love while adding world-class security, privacy, and digital safety protections," Microsoft said in the post.

This possible deal would strengthen Microsoft's position in Big Tech. Valued currently at $1.55 trillion, it's one of the most valuable companies globally. The company was not included in the congressional antitrust hearing last week that included Facebook, Google, Apple, and Amazon.

Acquiring TikTok would make Microsoft more powerful and allow them to compete with Facebook as well as YouTube, which is owned by Google. While those social media sites have been securing their position as social networks, Microsoft has been focusing on enterprise software. However, it does own business networking site LinkedIn. Not being involved in social media, it makes it more likely regulators would approve of the acquisition.

Microsoft said it expects to conclude discussions with ByteDance by September 15. Despite this admission, TikTok was still assuring officials and fans that it was "here for the long run." Users of the app were filling it all weekend with passionate responses that expressed concern for what would happen to their favorite sharing app.

Trump was only considering two options for changing the Chinese ownership of TikTok. One of these involved the Committee on Foreign Investment in the United States that started investigating ByteDance acquiring three years ago. The president considered signing an order to divest the company, according to people familiar with the discussions.

The other option he considered was using a 2019 executive order to designate TikTok as a national security threat and bar American companies and workers from doing business with it. Trump did this with the Chinese-owned Huawei last year. It was learned earlier this year that TikTok was accessing the clipboards of iPhone users. While the company assured that it changed its app to fix this problem, the beta for iOS 14 shows that they are still accessing it.

Trump and Secretary of State Mike Pompeo have been critical of TikTok's Chinese ownership in the past. They have said it is a threat to national security and threatened to ban it. ByteDance explored selling TikTok, but they would still prefer to keep it if possible.

Microsoft reported that it informed CFIUS of its negotiations with ByteDance. It also admitted it may bring in other American investors to take on a minority stake of the platform.

In its blog, Microsoft said it would "ensure that all private data of TikTok's American users is transferred to and remains in the United States." TikTok contends it already keeps U.S. user data stored in the U.S. and that it doesn't turn it over to the Chinese government. 

Trump has an additional reason to dislike TikTok. Before his Tulsa rally, there was a concerted effort by TikTok users to request tickets but not show up, to make it seem as if more people would be attending. Trump's campaign said more than a million requests for tickets came in. However, only 6,000 people attended the rally. The campaign said later that this effort of TikTok users had no impact.

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