Microsoft deal to buy TikTok in US 'moving quickly'

Deal aims to address security concerns from government.

TikTok: owned by ByteDance
TikTok: owned by ByteDance

US software giant Microsoft said it is "moving quickly" on a deal with TikTok's Chinese parent company ByteDance to buy its US operations.

The proposed deal aims to keep the video-sharing platform alive in markets where governments have serious security concerns over user security and privacy. It means that Microsoft would also take over the company in Australia, New Zealand and Canada.

Microsoft chief executive Satya Nadella met with US president Donald Trump on Sunday to discuss the agreement and Trump's concerns over TikTok's current US operations and the potential for user information to be shared with the Chinese government.

In a corporate blog post afterwards, Microsoft said "it fully appreciates the importance of addressing the president's concerns", including the transferring of all US user data to the US and deleting any backup data from servers outside the country. It added that "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".

Microsoft, which is also the parent company of LinkedIn, said it is aiming to complete its discussions with ByteDance no later than 15 September. While Microsoft would own and operate TikTok in these four markets, the company may also invite other US minority investors to participate, the blog post stated.

This deal replaces a proposal rejected earlier by the White House under which ByteDance would retain a minority stake in TikTok's US business. ByteDance's reluctance to sell its US operations completely was suggested in a report by the South China Morning Post on Sunday, saying the Chinese company preferred an independent spin-off to a direct sale to Microsoft. Campaign has reached out to ByteDance for comment.

But Trump has appeared dead set against Chinese ownership, publicly vowing to ban the popular app while on board Air Force One on Friday. Over the weekend, a senior trade official told Fox News that Trump was likely to take action on TikTok by Monday – comments that were echoed by US secretary of state Mike Pompeo on Fox News on Sunday.

Australian investigations

Meanwhile, the Australian Broadcasting Corporation is reporting that the federal government in Canberra is stepping up its scrutiny of TikTok over similar security concerns.

The ABC said prime minister Scott Morrison has asked Australia's intelligence agencies to investigate potential security threats from TikTok while the home affairs department considers how to mitigate any privacy or data security risks uncovered.

TikTok and China's response to US criticism

TikTok has long argued that it does not share international user data with Beijing and maintains that it respects user privacy. On Saturday, TikTok US general manager Vanessa Pappas posted a video message by notification to all US users, saying: "We're not planning on going anywhere." But in the message, Pappas' response takes a softer approach, thanking users for their support, noting the jobs and content initiatives the platform has funded in the US.

Meanwhile, Chinese reaction to the weekend's events has been sharp. The editor-in-chief of state media publisher Global Times slammed the "hunting and looting of TikTok by the US government" as ploy to force ByteDance into selling low out of desperation. It argued that the US is less concerned about national security, whereas "the real issue that truly concerns Washington is the ability of Huawei and TikTok to challenge the high-tech hegemony of the US".

TikTok has been been in the crosshairs of a political battle for weeks, riding out considerable upheaval across Asian markets following its ban in India, a potential ban in Pakistan and switching its platforms in Hong Kong following the introduction of a new national security law from Beijing.

A version of this story first appeared on Campaign Asia-Pacific

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