TikTok faces a tough time on American territory. Earlier reports indicated the US government could ban the app for video sharing, but things changed when Microsoft showed interest in buying the app’s US business.
Trump has warned that if there is no deal, he will block the device operated by China’s ByteDance on September 15. ByteDance is under pressure to sell its US company after a ban on Chinese tech firms has been imposed by Mr Trump.
The ban on TikTok stems from allegations that TikTok is the Chinese government’s provider of American citizenship data. However the same was denied by both TikTok and the Chinese government.
“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,” the company said in a statement.
President Trump has agreed to the Microsoft TikTok agreement on the basis that if any US corporation buys TikTok and demands the same from Microsoft CEO, the US Treasury will get a cut from the contract.
“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,” Microsoft said in a statement.
But the vision of making some cash out of the Microsoft-TikTok agreement might not be a cakewalk for the US government because it is a private transaction and legal challenges may come along the way, a study says.
Microsoft said it would take over operations of TikTok in the United States , Canada , Australia and New Zealand under the agreed contract. This said it will ensure all of TikTok ‘s American users ‘ private data is moved to and stays in the US.
Microsoft may be inviting other US investors to acquire minority stakes in TikTok, the company said. Around 70 percent of the investors in ByteDance come from the US.
ByteDance and the White House did not respond immediately to requests for comment. According to the paper, the United States Foreign Investment Committee will oversee the negotiations between ByteDance and Microsoft, a US government body that has the power to block any deal.