Microsoft Corp. has resumed attempts to buy the U.S. arm of TikTok -- the popular but controversial Chinese video-sharing app owned by ByteDance -- by Sept. 15, according to the Redmond, Wash.-based tech giant's blog. Talks between Microsoft and ByteDance resumed after Microsoft CEO Satya Nadella talked over the weekend with President Donald J. Trump, who had opposed the deal.
“Microsoft fully appreciates the importance of addressing the president’s concerns,” the blog said. “It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the U.S., including the U.S Treasury.”
Microsoft said it may invite other American investors to participate on a minority basis in the purchase. This new structure would build on the experience TikTok users love, while adding security, privacy and digital safety protections.
Microsoft pledged to ensure the private data of TikTok’s American users will be transferred to and remain in the U.S. To the extent data is stored outside the U.S., Microsoft promised it would be deleted from those servers.
While the purchase is not guaranteed, Microsoft said it looks forward to continuing dialogue with the U.S government, including with the president. On Friday (July 31), Trump brought the negotiations between Microsoft and TikTok’s parent company, ByteDance, to a halt by expressing opposition to the deal.
Microsoft was expected to have a deal in place by Monday (Aug. 3). But the brakes were applied over the weekend after Trump said he intended to ban the app in America, opposing a sale to Mictrosoft because he alleged that TikTok is used to spy on Americans, The Wall Street Journal (WSJ) reported.
As a result, TikTok had proposed to sweeten the pot with a vow to add up to 10,000 jobs in the U.S. over the next three years.
Still, sources told the WSJ that it’s unclear whether that would be enough to change Trump’s mind. Reuters reported that the president only agreed to support a deal if Microsoft reaches it with 45 days, hence the Sept. 15 target date.
Originally, Zhang Yiming, ByteDance Ltd.’s founder, had planned to keep a minority stake under the deal. But as part of concessions, he agreed to sell his stake, the WSJ reported.
Another source told the paper that the White House has been involved in the purchase negotiations and made it clear from the outset that the desired outcome is for TikTok to be owned by an American company.
TikTok has gained worldwide attention for its lip-synching and dancing video clips. About 315 million users reportedly downloaded TikTok in the first quarter, especially young people.
But the president’s re-election campaign has criticized TikTok, noting it could pass on the data it collects from Americans to China’s authoritarian government. TikTok has denied the allegations.
Secretary of State Mike Pompeo had told CNN on Sunday that Trump would take action in the coming days to ban Chinese apps, including TikTok, due to alleged national-security risks.
“Here's what I hope that the American people will come to recognize,” Pompeo said. “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 -- could be their facial recognition pattern, it could be information about their residence, their phone numbers, their friends, who they're connected to.”
Also on Sunday, two GOP senators said they supported ByteDance’s move to divest its operations in the U.S., Reuters reported.
Sen. John Cornyn of Texas said on Twitter that a divestment "and purchase by [a] U.S. company is win-win." Sen. Roger Wicker of Mississippi, chairman of the Senate commerce committee, agreed, but noted "tight security measures need to be part of any deal in order to protect consumer data and ensure no foreign access."
However, sources told Reuters that some Republicans had warned Trump that banning TikTok in the United States ahead of the November election could anger young voters.