Tech giant Microsoft’s offer to purchase popular short-video format application TikTok’s operations from its parent company ByteDance was rejected on Sunday as the deadline set by U.S. President Donald Trump for the Chinese company to divest ownership of the app nears.
In a statement, Microsoft said they were informed on September 13 by ByteDance that it will not be selling TikTok’s US operations to Redmond, the Washington-based company.
“We are confident our proposal would have been good for TikTok’s users while protecting national security interests,” Microsoft said.
Microsoft said their offer to TikTok would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation.
“We look forward to seeing how the service evolves in these important areas,” Microsoft said in its September 13 statement.
Meanwhile, only a few days before President Donald Trump’s deadline on September 20, the New York Times reported, that another American company Oracle was chosen as TikTok’s partner in its U.S. operations.
Citing sources from Microsoft and other people involved in negotiations, the New York Times report said it is still unclear if Oracle as the company’s technology partner will also take majority ownership in the popular social media app.
The announcement came as a shock to the tech community as Microsoft has been seen as an early frontrunner in the negotiations to purchase the popular short-form video application as many see the tech giant as having deep pockets to carry out the expected multimillion-dollar deal.
The U.S. enterprise software giant, following Microsoft’s lead, was also in talks with a group of U.S. venture capitalists General Atlantic and Sequoia Capital that are also shareholders in TikTok in assisting them in the negotiations.
Although Microsoft has earlier been working with the US government to seal the deal with ByteDance, Oracle CEO Larry Ellison, a big supporter of President Trump, was seen as a frontrunner in closing the deal.
Trump’s Executive Order for ByteDance to divest assets looms
Earlier on August 6, U.S. President Donald Trump through an Executive Order told TikTok’s parent company ByteDance to divest its U.S. assets as part of the White House’s efforts to put pressure on the Chinese company.
Trump issued the latest order on top of the previous executive order that commands U.S. businesses not to transact businesses with the Chinese company citing national security concerns.
Back in August, Bytedance and Microsoft announced they are in talks to sell TikTok not only in the United States but also in Australia and New Zealand.
Meanwhile, due to the latest Executive Order from Trump, the Chinese company has also threatened legal action against the U.S. President’s order claiming it was issued without due process.
President Trump earlier said there is ‘credible evidence’ that ByteDance might take action that will threaten to impair national security in the United States. The order also prohibited the transaction resulting in the acquisition as well as the ownership of Musical.ly by ByteDance.
ByteDance Ltd. acquired American-owned Musical.ly Inc. on November 9, 2017, and merged it into TikTok on August 2, 2018. Musical.ly Inc. later changed its name to TikTok Inc. growing into a popular short-form video app worldwide.
Popular short video format app TikTok, with 800 million users worldwide, has seen increased users from the U.S. with over 100 million users. TikTok, owned by Chinese developer ByteDance, has been downloaded 175 million times in the U.S.
Through the app, Trump says TikTok captures “vast swaths of information” that includes Internet and other network activity information such as location data, browsing, and search histories.
The latest order also gives authority to U.S. officials particularly the Committee on Foreign Investments in the United States to dig into the books and information systems of the company as well as ensure that TikTok transfers ownership to an American citizen or a company owned by Americans.
Trump also expressed wariness that TikTok would easily give the Chinese government access to data collected from U.S. nationals which ByteDance denied repeatedly.
Aside from TikTok, Trump also issued an executive order asking U.S. business not to transact business with Chinese tech giant Tencent’s popular messaging application WeChat, a popular messaging app for Americans coming from the Chinese diaspora.
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