Microsoft seeks TikTok US acquisition

Following a conversation between Microsoft chief executive Satya Nadella and president Donald Trump, the tech giant is exploring the purchase of TikTok in the United States.

The move follows a weekend of speculation around the future of the popular Chinese social media app, with concerns raised by both the president and secretary of state Mike Pompeo around user data being fed back to the Chinese state.

“It could be their facial recognition patterns, it could be information about their residence, their phone numbers, their friends, who they’re connected to – those are the issues that president Trump has made clear we’re going to take care of,” Pompeo told Fox News yesterday.

At the start of July, Pompeo revealed the US was seeking to ban several Chinese apps, including TikTok.

On Friday, Trump threatened to ban the app in the US, with a federal committee reviewing whether that is possible.

TikTok’s US user data is stored in the US, with strict controls on employee access, and its biggest investors come from the US, the company responded.

Chinese state media said banning TikTok would be “a barbaric act of a rogue government”, rejecting the US government claims about national security fears.

A statement from Microsoft said it “fully appreciates the importance of addressing the president’s concerns” and is committed to acquiring TikTok, subject to a complete security review and providing proper economic benefits to the US Treasury.

Microsoft said it 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 15 September.

The discussions will build upon a notification made by Microsoft and ByteDance to the Committee on Foreign Investment in the United States. The two companies have provided notice of their intent to explore a preliminary proposal that would involve a purchase of the TikTok service in the US, Canada, Australia and New Zealand and would result in Microsoft owning and operating TikTok in these markets. Microsoft may invite other American investors to participate on a minority basis in this purchase.

Among other measures, Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States. To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred.

“These discussions are preliminary and there can be no assurance that a transaction which involves Microsoft will proceed,” the statement concluded.

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