Tech giant Microsoft has allayed fears of a potential ban of TikTok in the U.S. announcing the resumption of talks for the purchase of the popular app on Sunday (August 2).
In a Microsoft blog post, the company said it is prepared to continue discussions to explore the purchase of popular short video app TikTok in the United States.
The statement was made following a conversation between Microsoft CEO Satya Nadella and U.S. President Donald Trump over the weekend.
“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,” Microsoft said.
Microsoft said it will “move quickly” in its discussions with TikTok’s parent company ByteDance in the coming weeks promising to complete talks no later than September 15.
How did TikTok get Trump’s attention?
President Trump on Friday (July 31) expressed opposition to the spin-off deal of Microsoft buying TikTok in the U.S. and threatened to ban the app in the U.S. through an executive order.
“As far as TikTok is concerned we’re banning them from the United States,” Trump said.
The potential ban of the short-form video app TikTok came after it was described by U.S. Secretary of State Mike Pompeo in June to be “feeding data directly to the Chinese Communist Party.”
The Trump administration has also expressed that the Chinese-owned app TikTok poses numerous national security threats specifically in keeping user data private.
This, however, was denied by the app’s owner ByteDance claiming it safeguards user data.
The White House has also raised concerns that the Chinese government, under local laws, can easily access personal data of Americans.
Aside from banning the app through an executive order, the U.S. government can also cite the International Emergency Economic Powers Act to block the app from being offered in Google’s Playstore and Apple’s App Store.
TikTok’s rising U.S. popularity
Tiktok has been rising in popularity in the U.S. which to date has over 100 million users who are mostly teenagers and millennials.
The Chinese-owned short video app said its American users come to TikTok for entertainment and connection, especially during the COVID-19 pandemic.
TikTok also said they hired nearly 1,000 people to join their U.S. team this year and will be hiring 10,000 employees into high paying jobs all over the country.
“Our $1 billion creator fund supports US creators who are building livelihoods from our platform. TikTok US user data is stored in the US, with strict controls on employee access,” TikTok said.
According to TikTok, their biggest investors come from the US stressing commitment to protecting users’ privacy and safety as they continue bringing joy to families and providing meaningful careers to those who create on the platform.
Why is the Microsoft deal important?
In the middle of threats made by the Trump administration for TikTok to divest its U.S. assets, Microsoft came into the picture.
Microsoft, which has been focused on providing business software for many years, has recently conveyed interest in the acquisition of TikTok’s U.S. operations as it gears towards getting hold of more consumer technology.
The move for TikTok’s acquisition was certainly evident as the company has also acquired similar companies such as professional networking company LinkedIn in 2016.
With a growing number of users in the U.S., TikTok is poised to gain more market valuation in the coming years as the app has started monetizing its app with advertisements slowly coming out in the platform.
Meanwhile, Microsoft stressed it is looking forward to continuing dialogue with the United States government including President Trump.
The ongoing discussions will build upon a notification made by Microsoft and ByteDance to the Committee on Foreign Investment in the United States.
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 United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets.
ByteDance, TikTok’s parent company, will still continue to own the app’s operations in other countries.
“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.
The Redmond, Washington-based company also said that it is included in their discussion to ensure that all private data of TikTok’s American users are transferred to and remains in the United States.
“To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred.”
Microsoft also said it appreciates the U.S. government and President Trump’s personal involvement in the issue as it continues to develop strong security protections for the country.
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