In a statement, Microsoft said Microsoft and ByteDance have provided notice of their intent to explore a deal resulting in Microsoft owning and operating the TikTok service in the U.S., Canada, Australia, and New Zealand. The company said it expects those talks to conclude by Sept. 15.
Trump said on Friday that he would soon ban TikTok in the United States. Trump and CEO Satya Nadella has spoken, the company said, and Microsoft was prepared to continue exploring the purchase of TikTok’s U.S. operations after their conversation.
“Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury,” the Microsoft statement said.
The White House did not immediately comment on the Microsoft statement.
Previously, there were reports that Microsoft was in advanced talks to buy the U.S. operations of TikTok, which has been a source of national security and censorship concerns for the Trump administration. Earlier Sunday, Secretary of State Mike Pompeo again raised the administration’s warnings about social media platforms.
“These Chinese software companies doing business in the United States, whether it’s TikTok or WeChat — there are countless more ... are feeding data directly to the Chinese Communist Party, their national security apparatus,” Pompeo said on Fox News Channel’s “Sunday Morning Futures.”
“Could be their facial recognition patterns. It could be information about their residence, their phone numbers, their friends, who they’re connected to. — those are the issues that President Trump has made clear we’re going to take care of,” Pompeo said.
In its statement, Microsoft said it may invite other American investors to participate on a minority basis in the purchase of TikTok. Financial terms were undisclosed.
TikTok’s U.S. user data is stored in the U.S., with strict controls on employee access, and its biggest investors come from the U.S., the company said earlier Sunday. “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,” a TikTok spokesperson said.
A federal committee has been reviewing whether Trump could ban TikTok in the U.S. Its members agree that TikTok cannot remain in the U.S. in its current form because it “risks sending back information on 100 million Americans,” Treasury Secretary Steven Mnuchin said.
“We all agree there has to be a change ... everybody agrees it can’t exist as it does,” Mnuchin said Sunday on ABC’s “This Week.”
As speculation grew over a ban or sale of the social media platform’s U.S. business, TikTok posted a video on Saturday saying, “We’re not planning on going anywhere.”
TikTok’s catchy videos and ease of use have made it popular, and it says it has tens of millions of users in the U.S. and hundreds of millions globally. Its parent company, Bytedance Ltd., launched TikTok in 2017. It bought Musical.ly, a video service popular with teens in the U.S. and Europe, and combined the two. It has a similar service, Douyin, for users in China.
But TikTok’s Chinese ownership has raised concern about the potential for sharing user data with Chinese officials as well as censorship of videos critical of the Chinese government. TikTok says it does not censor videos and it would not give the Chinese government access to U.S. user data.
“The President, when he makes his decision, will make sure that everything we have done drives us as close to zero risks for the American people,” Pompeo said. “That’s the mission set that he laid out for all of us when we get — we began to evaluate this now several months back. We’re closing in on a solution. And I think you will see the president’s announcement shortly.”
The debate over TikTok parallels a broader U.S. security crackdown on Chinese companies, including telecom providers Huawei and ZTE. The Trump administration has ordered that the U.S. stop buying equipment from those providers to be used in U.S. networks. Trump has also tried to steer allies away from Huawei over concerns that the Chinese government has access to its data, which Huawei denies.
ByteDance, the Chinese company that owns TikTok, accused Facebook of “plagiarism and smear,” as it looks to go on the front foot following continued pressure on its business from the U.S.
Late Sunday, the Beijing-based firm said that it is “committed to becoming a global company” but it has faced “all kinds of complex and unimaginable difficulties,” according to a CNBC translation of the Chinese statement.
These include an “intense international political environment, the collision and conflict of different cultures, and the plagiarism and smear of competitor Facebook,” the company said.
ByteDance did not elaborate on the statement but said it was mainly aimed at its domestic Chinese audience. Facebook was not immediately available for comment when contacted by CNBC.
ByteDance released its statement before Microsoft confirmed that it is in talks to buy TikTok. Microsoft CEO Satya Nadella spoke to President Donald Trump regarding a potential purchase of TikTok in the U.S., the company said. And the technology giant is exploring the purchase of TikTok in Canada, Australia, and New Zealand as well.
TikTok has faced multiple accusations from Washington of scooping up American user data to send back to the Chinese government. TikTok has repeatedly denied that it does this.
And before Microsoft announced its discussions to acquire part of TikTok, Trump said he would ban the social media app. Tensions between the U.S. and China have been rising with technology becoming one of the sectors caught in the middle of what some commentators have dubbed a “new Cold War.”
Meanwhile, Facebook, which is facing competitive pressures from TikTok, has tried to create rival products. Lasso, which was shut down last month, allowed people to record videos up to 15 seconds long and overlay music on top. And now Facebook is gearing up to launch another short video product called Instagram Reels.
Last week, TikTok CEO Kevin Mayer, who was hired in May from Disney, called out Facebook.
“We think fair competition makes all of us better. To those who wish to launch competitive products, we say bring it on. Facebook is even launching another copycat product, Reels (tied to Instagram), after their other copycat Lasso failed quickly,” he said in a blog post.
“But 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’s comments came after Facebook CEO Mark Zuckerberg touted the social network as being “a proudly American company,” in prepared remarks ahead of his testimony before the House Judiciary subcommittee on antitrust last Wednesday.
Factfile on Chinese video-sharing social networking app TikTok@AFPgraphics pic.twitter.com/RND3Caz2Jt
— AFP news agency (@AFP) August 3, 2020