President Donald Trump said he would act as soon as Saturday to ban TikTok, a prominent Chinese-owned video app that has become a source of national security concerns and censorship.
Trump’s remarks came after rumors were released that the administration wants to order ByteDance of China to sell TikTok. There have also been rumors Friday that Microsoft’s tech giant is in negotiations to buy the app.
In recent weeks, US officials and lawmakers have expressed concerns about Beijing’s wildly successful video site being used for sinister purposes, but the company has denied any ties with the Chinese government.
News reports circulated earlier Friday saying that Trump would allow its Chinese parent company ByteDance to divest the US operations of the device, but the president declared a ban.
Trump said to reporters on Air Force One: “As far as TikTok is concerned, we are banning them from the U.S ..”
According to a person familiar with the matter, Microsoft Corp. is considering an acquisition of TikTok ‘s operations in the US. A deal will offer the tech company a successful social media service and ease pressure from the U.S. government on the video-sharing app’s Chinese owner.
Although the administration was prepared to issue an order as soon as Friday, according to three people familiar with the matter, another person later said that the decision was on hold until President Donald Trump had thoroughly reviewed it. Each of the people asked not to be named because they had private discussions.
Any transaction could come up against regulatory hurdles. ByteDance purchased Musical.ly Inc. in 2017 and merged it with TikTok, creating a U.S. social-media hit — the first Chinese app to make such inroads. When TikTok became more popular, U.S. officials became increasingly worried about the Chinese government’s ability to use the app to collect data about U.S. people.
The US Foreign Investment Committee began a Musical.ly purchase review in 2019. CFIUS, which is investigating overseas acquisitions of U.S. companies, has taken on a much more proactive position in monitoring and authorizing transactions that could endanger national security in the past few years. These can suggest blocking or unwinding transactions by the President.
It’s also conceivable that there may be other potential buyers moving forward, another person familiar with the discussions said. Microsoft’s business rivals — Facebook Inc., Apple Inc., Amazon.com Inc., and Alphabet Inc. — match the profile of possible suitors, but they are all under U.S. regulators’ antitrust scrutiny, which will possibly make things more difficult.
A TikTok acquisition will be a massive coup for Microsoft, acquiring a successful mobile app that has won over young people with a steady diet of dance videos, lip-syncing clips, and viral memes. In the past, the company has dabbled in social media acquisitions, but in the lucrative market, it has not established its own famous service. In 2016, Microsoft purchased the job search and business networking company LinkedIn for $26.2 billion.
Microsoft may point to one acquisition that came with a large established user base that has evolved under its ownership — the 2014 Minecraft purchase, the best-selling video game ever.
