After rumors of a possible deal surfaced last week, Microsoft has publicly confirmed its intention to buy TikTok in the United States and several other areas.
The company has reaffirmed its intention to “act quickly to have discussions with TikTok’s parent company, ByteDance, within a few weeks”. The two companies have formally announced their intention to consider a preliminary proposal to purchase TikTok in the United States, Canada, Australia and New Zealand. This would result in Microsoft owning and operating TikTok in these markets. Microsoft also had the idea of inviting other American investors to participate in the purchase on a minority basis.
Microsoft’s CEO Satya Nadella spoke directly to President Donald Trump to discuss the possible purchase, and it is believed that the President will be personally involved when plans take shape. On Friday night, Trump reportedly said, “As for TikTok, we are banning it from the United States.” Trump said at the time that he did not support a deal between ByteDance and Microsoft, but has appeared to have changed his position since then.
TikTok has been increasingly reviewed by the U.S. government due to security concerns. TikTok is owned by the Chinese company ByteDance, which according to Chinese law can theoretically be forced to transfer all user data collected. TikTok collects a large amount of user data and has raised significant concerns about censorship and privacy.
Microsoft says it is “required to acquire TikTok, subject to a full security clearance and reasonable economic benefits to the United States, including the US Treasury Department”. The operating model for TikTok under Microsoft is said to ensure transparency for users and adequate security surveillance by governments in these areas, and to add “world-class security, data protection and digital security protection”.
“Microsoft would, among other things, ensure that all of TikTok’s American users’ private information is transferred to and remains in the United States. To the extent that such information is currently stored or secured outside of the United States, Microsoft would ensure this.” Data is deleted after transferring it from servers outside the country, “said Microsoft.
TikTok continues to restructure its operations in the West to reduce fears. The sun reports today that UK ministers have approved plans to allow ByteDance to move its headquarters from Beijing to London. The move “risks a big argument with Donald Trump,” so The sun. The UK is not a jurisdiction to be included in the potential Microsoft deal, so UK TikTok users are subject to Chinese corporate data laws.
Talks between ByteDance and Microsoft are reported to end on September 15th at the latest. Negotiations are still preliminary and there is “no assurance” that a deal will be made. Microsoft has announced that it will not release another update until a final result is available.
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