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Microsoft keen to buy TikTok in US

August 03, 2020 12:43 IST

TikTok has stressed that its US user data is already stored on US-based servers and backed up in Singapore, and is therefore not subject to Chinese law as some US officials have feared.

Technology giant Microsoft has said it will continue talks to purchase the popular Chinese-owned video-sharing app TikTok's American business after its India-born CEO Satya Nadella and President Donald Trump had a conversation.

The statement from Microsoft came days after Trump said that he could use the emergency economic powers or an executive order to ban TikTok in the US over national security issues.

 

Redmond-headquartered Microsoft, in a statement on Sunday, said that following a conversation between Nadella and Trump, it is prepared to continue discussions to explore a purchase of TikTok in the US.

“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 statement said.

Microsoft will move quickly to pursue discussions with TikTok's parent company ByteDance in a matter of weeks and will complete these discussions in any event by September 15, it said.

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

Trump recently threatened to ban the popular video-sharing app in the US after concerns were raised that it could be a national security risk.

"As far as TikTok is concerned, we're banning them from the US," Trump told reporters on Friday.

Microsoft said the discussions with ByteDance, TikTok's parent firm, will build upon a notification made by Microsoft and ByteDance to the Committee on Foreign Investment in the United States (CFIUS).

Microsoft added that "in any event" it would finish talking with ByteDance no later than September 15.

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 US, Canada, Australia and New Zealand, and would result in Microsoft owning and operating TikTok in these markets.

Microsoft may also invite other American investors to participate on a minority basis in this purchase.

“This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections.

“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 said.

It said that among other measures, Microsoft would ensure that all private data of TikTok's American users is transferred to and remains in the US.

“To the extent that any such data is currently stored or backed-up outside the US, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred,” it said.

Microsoft said it appreciates the US government and Trump's personal involvement as it continues to develop strong security protections for the country.

The technology giant said that the discussions are preliminary and there was no assurance that a transaction which involves Microsoft will proceed.

“We do not intend to provide further updates until there is a definitive outcome to our discussions,” it said.

India has banned as many as 106 Chinese apps, including TikTok, a move welcomed by both the Trump administration and the US lawmakers.

US Treasury Secretary Steven Mnuchin on Sunday said TikTok cannot stay in the current format in the US as it "risks sending back information on 100 million Americans".

“I've said publicly that it's under review. I will say publicly that the entire committee agrees that TikTok cannot stay in the current format because it risks sending back information on 100 million Americans," Mnuchin, who chairs the Committee on Foreign Investment in the US, told the ABC News.

Mnuchin said he has spoken to several top American lawmakers and all agree that "there has to be a change".

“The president can either force a sale or the president can block the app using IEEPA (International Emergency Economic Powers Act).

“And I'm not going to comment on my specific discussions with the president,” he said in response to a question.

In recent weeks, US Secretary of State Mike Pompeo has accused TikTok of collecting personal information of Americans.

TikTok has previously stressed that its US user data is already stored on US-based servers and backed up in Singapore, and is therefore not subject to Chinese law as some US officials have feared.

Photograph: Reuters

Yoshita Singh in New York
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