Microsoft Confirms It's in Talks to Acquire TikTok in the U.S.
It's not a done deal. 'These discussions are preliminary and there can be no assurance that a transaction which involves Microsoft will proceed,' the company says.
UPDATE: Microsoft on Sunday confirmed that it's in talks to acquire TikTok from Bytedance in the U.S., Canada, Australia, and New Zealand.
If successful, the deal "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," Microsoft said in a statement.
It's not a done deal. "These discussions are preliminary and there can be no assurance that a transaction which involves Microsoft will proceed," the company said. But it promised to complete any negotiations before Sept. 15, 2020.
The news comes after the Wall Street Journal reported that Microsoft had paused negotiations to invest in TikTok after President Trump said he would ban the app in the US. Microsoft CEO Satya Nadella has since spoken to Trump, though, and the company "is prepared to continue discussions to explore a purchase of TikTok in the United States," it said.
"This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections," Microsoft said. "The operating model for the service would be built to ensure transparency to users as well as appropriate security oversight by governments in these countries.
"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."
Original Story 8/1:
President Donald Trump on Friday said the U.S. will ban popular video-sharing app TikTok.
"As far as TikTok is concerned, we're banning them from the United States," Trump said during a Q&A with reporters aboard Air Force One, according to White House pool reporter David Cloud of the LA Times. The president said he has the authority to do so via an executive order.
As Reuters reports, TikTok parent company ByteDance might try to get around the ban by divesting its US operations. Microsoft would then "take over TikTok in the United States" and "be in charge of protecting all of TikTok's US user data," Reuters says. Microsoft has not commented publicly on that report. On Air Force One, Trump said he's not in favor of such a deal.
In response, Vanessa Pappas, TikTok's US general manager, said in a video message that "we're not planning on going anywhere." She made a point of highlighting the company's 1,500 US-based workers and "the additional 10,000 jobs that we're bringing into this country over the next three years," plus the recently announced $200 million creator fund.
"We appreciate the support, we're here for the long run," Pappas said. "Continue to share your voice here and let's stand for TikTok."
A message to the TikTok community. pic.twitter.com/UD3TR2HfEf— TikTok (@tiktok_us) August 1, 2020
Earlier this week, meanwhile, TikTok's new CEO Kevin Mayer said US officials should be more concerned about Facebook than TikTok. "Let's focus our energies on fair and open competition in service of our consumers, rather than maligning attacks by our competitor—namely Facebook—disguised as patriotism and designed to put an end to our very presence in the US," Mayer wrote in an 800-word blog post.
Trump has not commented publicly on the TikTok ban today. Earlier on Friday, he said only that "We're looking at TikTok [and] may be banning TikTok."
.@JenniferJJacobs: Are you expecting a @tiktok_us decision today?"— CSPAN (@cspan) July 31, 2020
President Trump: "We're looking at TikTok. We may be banning TikTok. We may be doing some other things. There's a couple of options...we are looking at a lot of alternatives with respect to TikTok." pic.twitter.com/USrfvhhOUS
But the move has been floated for some time. On Wednesday, Treasury Secretary Steven Mnuchin said TikTok is under "review" by the Committee on Foreign Investment in the United States. "We'll be making a recommendation to the president on it this week."
In early July, Secretary of State Mike Pompeo told Fox News that the US government was looking to ban certain social media apps offered by Chinese companies, including TikTok. "We are taking this very seriously We are certainly looking at it," he said.
ICYMI: @SecPompeo on comments earlier this week about whether the U.S. would ban the app TikTok: "We have been engaged in a constant evaluation about ensuring that we protect the privacy of American citizens and their information." pic.twitter.com/cI0kOcyr94— CSPAN (@cspan) July 8, 2020
The concern is that China will use these apps, as well as China-based companies like Huawei and ZTE, to spy on its international users. The US had not offered any proof of this happening yet, but they argue that if China demanded access to user data from companies in the country, those companies would have no choice but to comply.
"Americans should be concerned," National Security Advisor Robert C. O'Brien said in June. "We should not be concerned only for the Chinese people but for ourselves. Xi Jinping's ambitions for ideological control are not limited to his own people. The CCP's stated goal is to create a 'Community of Common Destiny for Mankind,' and to remake the world according to the CCP. The effort to control thought beyond the borders of China is well under way," O'Brien said.
The ACLU, however, says the move raises freedom-of-speech concerns.
"Banning an app that millions of Americans use to communicate with each other is a danger to free expression and is technologically impractical," ACLU Surveillance and Cybersecurity Counsel Jennifer Granick said in a statement. "With any Internet platform, we should be concerned about the risk that sensitive private data will be funneled to abusive governments, including our own. But shutting one platform down, even if it were legally possible to do so, harms freedom of speech online and does nothing to resolve the broader problem of unjustified government surveillance."
If the ban does go through, VPNs could help TikTok fans avoid the blockade. People in India—where TikTok is already banned—have been using them with mixed results. Russia, meanwhile, abandoned its bid to ban messaging app Telegram amid a mixture of VPN use from consumers and Telegram's own efforts to host the app over third-party cloud providers.
Entrepreneur Editors' Picks
'No One Believed' This Black Founder Was the Owner of a Liquor Brand in 2012. He Launched to Great Acclaim — Then Lost It All. Here's How He Made a Multi-Million-Dollar Comeback.
Inspired by Elon Musk's Twitter Takeover, Here Are 10 Marketing Tactics That Will Help You Make the Most of Big Changes to Your Company
These Brothers Transformed a High School Project Into the Largest Online Soccer Retailer of All Time. Here's What the World Cup Means for Business Now.
'I Just Lost All My Life Savings': Michigan Woman Lost $15,000 in Facebook Marketplace Car Scam
This Founder Was Dismayed by Food Waste in the Restaurant Industry, So She Started a Zero-Waste Grocery Line That Now Caters Events for Nike
Netflix's Secret Club Allows Members to Preview Content Before Anyone Else — But There's a Catch
Franchising Could Be the Secret to Reaping the Rewards of a Down Economy. Here Are 5 Reasons Why.