TOPLINE
As talks resume in Microsoft’s bid to buy TikTok in the U.S., the app’s Chinese parent company, ByteDance, has said it disagrees with the White House's push for a sale and is trying to allay American security concerns over the platform, CEO Zhang Yiming told employees in a letter seen by Bloomberg.
Zhang Yiming, founder and CEO of Bytedance, said his company is "working overtime" to find a ... [+]
KEY FACTS
The video-sharing app, explosively popular among U.S. teens, has been the target of U.S. lawmakers who have raised concerns about a Chinese company collecting data on American users, and potentially posing a national security risk.
The app has repeatedly denied mishandling user data.
Zhang told employees in the letter: “The current geopolitical and public opinion environment is becoming more and more complex. We are facing great external pressure in some markets.
“Our team in response has been working around the clock and overtime in the past few weeks to strive for the best outcome,” he added.
Last week, tensions culminated with President Trump proposing to ban the app altogether in the U.S., but made a U-turn on the decision after advisors warned the move could alienate young voters.
But talks resumed this weekend and Trump has now given tech giant Microsoft 45 days to close a deal to buy TikTok’s U.S. operations, in a move that would likely value it at as much as $50 billion, according to ByteDance.
Additional info
The proposed deal would see Microsoft oversee TikTok’s operations in the U.S., Canada, Australia and New Zealand, while all private data of U.S. users would be transferred to the U.S., Reuters reports. If successful, the bid will likely position Microsoft against social media giants Facebook and Snap.
Crucial quote
Zhang wrote in the letter: “Even though we’ve repeatedly stressed that we’re a privately-run business, and despite our willingness to adopt even more technical solutions to allay their concerns, CFIUS still believes ByteDance has to sell the TikTok U.S. operation. We do not agree with this decision.
“We’ve always firmly protected the security of users’ data, the platform’s independence and transparency,” he added.
Key background
ByteDance has captured the attention of hundreds of millions of teenagers around the world with short, user-generated videos selected by the algorithms powering the TikTok app. TikTok has made a number of moves in efforts to demonstrate its distance from its Chinese operations and allay lawmakers’ concerns, notably hiring Disney executive Kevin Mayer as CEO in May. The company has also hired 1,000 staff in the U.S., and has proposed moving its HQ to London, England. Nonetheless, the Committee on Foreign Investment in the United States last year launched a national security probe into TikTok’s acquisition of Musical.ly for $1 billion in 2017. CFIUS claims TikTok did not seek clearance to buy the app.
Big number
TikTok boasts 100 million users in the U.S., most of which are aged between 16 and 24.
What to watch for
September 15 is the deadline set by CFIUS, by which Microsoft should reach a deal with TikTok, the company said in a statement.
Further reading
Microsoft Renews Its Pursuit Of TikTok After Talking With Trump (Forbes)
As TikTok Takes Over America, It’s Making A Disney Executive Its New CEO (Forbes)
