After announcing plans to ban the wildly popular, Chinese-owned video app TikTok in the U.S. late Friday, President Donald Trump has now reportedly given his go-ahead for Microsoft to pursue an acquisition of the app — so long as a deal is clinched within 45 days.
On Friday, Trump suggested he wouldn’t be open to an acquisition of TikTok by Microsoft that would allow the hit micro-video app to continue to operate stateside. Trump’s aboutface arrived amid pressure from advisers who suggested that a TikTok ban would alienate voters who use the app ahead of the November election, Reuters reports, and also concerns that a ban could precipitate complex legal entanglements.
The proposed deal would see Microsoft taking over TikTok’s operations in the United States, Canada, Australia, and New Zealand. It would also ensure that data culled from TikTok’s American users is transferred to and remains in the United States.
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“Microsoft fully appreciates the importance of addressing the President’s concerns,” the company said in a blog post over the weekend, after Trump had spoken with CEO Satya Nadella. “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 will move quickly to pursue discussions with TikTok’s parent company, ByteDance, in a matter of weeks, and in any event completing these discussions no later than September 15, 2020.”
Reuters notes that this deadline was set by the Committee On Foreign Investment In The United States (CFIUS), which had been investigating TikTok with respect to ongoing security and privacy concerns. The CFIUS will also be overseeing the ByteDance and Microsoft negotiations, and has the right to block any ensuing agreements.
Reuters notes that the TikTok sale is bound to further inflame tensions between the U.S. and China, following disputes over trade and the coronavirus pandemic — given that Trump initially said he was considering banning the app due to China’s handling of the outbreak.
While a price point has yet to be floated, Reuters notes that ByteDance recently valued TikTok at upwards of $50 billion.
We’ve reached out to TikTok for comment on the negotiations, and will update this post with any additional information. In a video statement over the weekend in response to Trump’s intentions to ban the app, TikTok U.S. general manager Vanessa Pappas said that TikTok wasn’t planning on going anywhere. She also noted that the company represented an enormous economic opportunity for America, including its intention to hire 10,000 U.S. employees over the next three years and erect a $1 billion Creator Fund within that same timeframe.
TikTok has long denied sharing user data with the Chinese government. “TikTok U.S. user data is stored in the U.S., with strict controls on employee access,” the company told Tubefilter on Saturday.