Trump will give Chinese owner of TikTok 45 days to agree to sale: report
(File photo: Reuters)
NEW DELHI: President of the United States Donald Trump Agreed To Give China ByteDance 45 Days To Negotiate The Sale Of The Popular Short Video App Tik Tok Microsoft Corp, two people familiar with the matter said Sunday.
US officials have said that TikTok under its Chinese parent represents a national risk because of the personal data it handles. Trump said Friday that he planned to ban TikTok in the United States after dismissing the idea of a sale to Microsoft.
But after a discussion between Trump and Microsoft CEO Satya Nadella, the Redwood, Washington-based company, said in a statement Sunday that it would continue negotiations to acquire TikTok from ByteDance, and that it was aimed at reaching an agreement. before September 15.
It wasn’t immediately clear what changed Trump’s mind. Banning TikTok would alienate many of its young users before the US presidential election in November, and would likely trigger a wave of legal challenges. Several prominent Republican lawmakers have made statements in the past two days urging Trump to endorse the sale of TikTok to Microsoft.
“He’s winning everything,” Republican Senator Lindsey Graham tweeted in response to Trump’s new stance on Sunday.
Negotiations between ByteDance and Microsoft will be overseen by the Committee on Foreign Investment in the United States (CFIUS), a panel of the United States government that has the right to block any deal, according to sources, who requested anonymity before an announcement. from the White House. . Microsoft warned in its statement that there is no certainty that an agreement will be reached.
“Microsoft fully appreciates the importance of addressing the president’s concerns. It is committed to acquiring TikTok subject to a full security review and to providing adequate economic benefits to the United States, including the United States Treasury,” Microsoft said in a statement. .
ByteDance and the White House did not immediately respond to requests for comment.
As relations between the United States and China deteriorate due to trade, Hong Kong autonomy, cyber security and the spread of the new coronavirus, TikTok has become a critical point in the dispute between the two largest economies in the world.
Microsoft, which also owns the professional social media network LinkedIn, would become a major competitor to social media giants like FaceBook Inc and Snap Inc if it tried to make TikTok succeed.
Under the proposed deal, Microsoft said it would take over TikTok operations in the United States, Canada, Australia, and New Zealand. He said he would ensure that all the private data of American TikTok users is transferred and remains in the United States.
Microsoft may invite other US investors to acquire minority stakes in TikTok, the company added. About 70% of the external capital ByteDance has raised comes from the United States.
It is unclear how much Microsoft could pay for TikTok. Reuters reported last week that ByteDance’s valuation expectations for the app exceeded $ 50 billion, although US pressure to divest it could lower that price.
A key issue in the negotiations will be to separate TikTok technology from ByteDance’s infrastructure and access, to alleviate US concerns about the integrity of personal data. ByteDance owns a Chinese short video app called Douyin that was based on the same code used for TikTok.
One idea under consideration is to give Microsoft and ByteDance a transition period to develop technology for TikTok that will be completely separate from ByteDance, one of the sources said.
The United States has increasingly been analyzing app developers about the personal data they handle, especially if some of it involves U.S. military or intelligence personnel. Ordering the divestment from TikTok would not be the first time that the White House has taken action on such concerns.
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 CFIUS ordered it to divest.
In 2018, CFIUS forced China’s Ant Financial to scrap plans to buy MoneyGram International Inc over concerns over data security that could identify U.S. citizens.
ByteDance was valued at up to $ 140 billion earlier this year when one of its shareholders, Cheetah Mobile, sold a small stake in a private deal, Reuters reported. Investors in the new company include SoftBank Group Corp. of Japan.