Microsoft Lays Out Plan To Acquire TikTok In The US And Australia

PARIS, FRANCE - MARCH 05: In this photo illustration, the social media application logo, Tik Tok is displayed on the screen of an iPhone on March 05, 2019 in Paris, France. The social network broke the rules for the protection of children's online privacy (COPPA) and was fined $ 5.7 million. The fact TikTok criticized is quite serious in the United States, the platform, which currently has more than 500 million users worldwide, collected data that should not have asked minors. TikTok, also known as Douyin in China, is a media app for creating and sharing short videos. Owned by ByteDance, Tik Tok is a leading  video platform in Asia, United States, and other parts of the world. In 2018, the application gained popularity and became the most downloaded app in the U.S. in October 2018. (Photo by Chesnot/Getty Images)
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Video sharing app TikTok could be acquired in the United States, Australia and several other regions as early as next month.

The huge shakeup comes after US President Donald Trump revealed his plans to ban the app.

“As far as TikTok is concerned, we’re banning them from the United States,” Trump told reporters over the weekend.

“It’s going to be signed tomorrow,” he added.

However, it now seems far more likely that ByteDance – the company behind TikTok – will be pressured into divesting its ownership of the app in the United States.

Microsoft quickly emerged as a likely suitor to take on TikTok in the US.

It has since been revealed President Trump and Microsoft CEO Satya Nadella have met to explore the possible purchase.

“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,” Microsoft confirmed.

“During this process, Microsoft looks forward to continuing dialogue with the United States Government, including with the President.”

Microsoft confirmed the takeover would not be exclusive to the US and would in fact be extended to include Canada, Australia and New Zealand.

“The discussions with ByteDance will build upon a notification made by Microsoft and ByteDance to the Committee on Foreign Investment in the United States (CFIUS),” Microsoft said.

“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 United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets.”

Under the proposed deal, Microsoft would add its “world-class security, privacy, and digital safety protections” to the popular app.

It would also ensure all private data is transferred to and remains in the United States and deleted from servers outside the country after it is transferred.

If the sale does go ahead, it is unclear how much Microsoft will have to pay for it.

According to the Financial Times, ByteDance has been valued as high as $US140bn in private share transactions,

tiktok responds

Following Trump’s announcement over the weekend, TikTok issued a strong response highlighting its contribution to US society.

“These are the facts: 100 million Americans come to TikTok for entertainment and connection, especially during the pandemic,” said a TikTok spokesperson.

“We’ve hired nearly 1,000 people to our US team this year alone, and are proud to be hiring another 10,000 employees into great paying jobs across the US.

“Our $1 billion creator fund supports US creators who are building livelihoods from our platform. TikTok US user data is stored in the US, with strict controls on employee access. TikTok’s biggest investors come from the US. We are committed to protecting our users’ privacy and safety as we continue working to bring joy to families and meaningful careers to those who create on our platform.”

TikTok’s US general manager Vanessa Pappas, who is Australian, also responded.

TikTok Australia has been contacted for comment.

The potential takeover in Australia would also resolve some of the tensions between the Australian Government and TikTok.

According to the ABC, the Federal Government is currently conducting two complementary investigations into the app.

There are separate reports of MPs pushing to ban the app in Australia, while Prime Minister Scott Morrison has also said it was “right for people to have an increased awareness of where these platforms originate and the risks they present”.

The company last month launched an advertising campaign in Australia urging the government not to make the app a “political football“.

 

 

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