Microsoft offers way out of TikTok impasse

Microsoft has confirmed it has offered to step in to buy the US operations of the controversial yet beloved video-sharing app TikTok from its Chinese parent, ByteDance, in an attempt to stave off a potential ban of the service in the US.

Due to its Chinese origins and a perceived threat to the national security of the US, ByteDance has become the latest target of president Donald Trump’s obsessive campaign against Chinese business interests. Speaking on Friday, Trump said he would move to ban TikTok in the US.

Over the weekend, Microsoft revealed its CEO, Satya Nadella, had spoken with Trump and that Microsoft was conducting discussions about buying TikTok in the US.

“Microsoft fully appreciates the importance of addressing the President’s concerns. 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,” the firm said in a statement.

“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 15 September 2020. During this process, Microsoft looks forward to continuing dialogue with the US government, including with the President.”

Both companies have already notified the discussions to the Committee on Foreign Investment in the US (CFIUS), and added that the proposal would also involve a purchase of TikTok in Australia, Canada and New Zealand, although it made no mention of the UK.

Microsoft said a new structure would build on the existing TikTok experience, adding new security, privacy and digital safety protections, backed by a transparent operating model and security oversight by the relevant governments. It also proposes to house all private data relating to US users within the US.

“These discussions are preliminary and there can be no assurance that a transaction which involves Microsoft will proceed. We do not intend to provide further updates until there is a definitive outcome to our discussions,” said Redmond.

In a video message, TikTok’s US general manager, Vanessa Pappas, said: “I want to say thank you to the millions of Americans who use TikTok every day, bringing their creativity and joy into our daily lives. We have heard your outpouring of support and we want to say thank you. We’re not planning on going anywhere.”

In an open letter to ByteDance employees – translated via Google – company founder Zhang Yiming said the current geopolitical environment was becoming more complex, and that the company faced “greater external pressure” in some markets, including the possibility of a US ban or forced sale.

Yiming said ByteDance had been actively cooperating with the US’s investigation into its acquisition of Musical.ly, the social music video app it acquired in 2017 and merged into TikTok, ultimately bringing TikTok to a global audience. He said he did not agree with the decision to force a sale because “we have always insisted on ensuring user data security, platform neutrality and transparency”.

“The attention and rumours [sic] of TikTok from the outside world may continue for some time. I hope everyone can maintain a good morale amidst the noise and challenges, see long-term determination, trust the company to make good judgements in complex situations, and give employees sufficient support,” he wrote.

“Through continuous innovation and firm execution, we provide users with the best service and maintain rapid growth, which is the most solid backing for dealing with the crisis.”

Yiming said TikTok had become a part of global culture, with hundreds of millions of users now active on the platform, and moved to reassure employees that he had confidence in the service’s future.

Meanwhile, unconfirmed reports from the UK suggest that prime minister Boris Johnson will imminently announce that ByteDance will relocate its headquarters and senior management from China to the UK.

According to The Sun, ministers have already approved a major investment from ByteDance. The paper claimed ministers had said that the concerns that led the UK to U-turn on the use of Huawei equipment in national mobile and broadband networks last month did not apply in this case, as ByteDance did not have access to critical national infrastructure.