President Trump has said TikTok, the popular social media video app, will have to sell its United States arm of the company before September 15th, or it will be shutdown. This decision comes on the wake of companies, campaigns, and others banning the app due to concerns China is using it to spy on American citizens.
Microsoft wants to buy TikTok’s American business in the United States, Canada, Australia, and New Zealand. President Trump, however, said on Friday the US government would ban the app, and opposed the deal. This decision changed, as Microsoft confirmed their CEO, Satya Nadella, reached common ground with Trump to let the deal go through, as long as it’s done by September 15th. Former CEO Steve Ballmer told CNBC the company’s “well-equipped,” to deal with the regulatory issues that will come with the deal.
TikTok has been under fire as as source for China to collect Americans’ personal information and data. Amazon urged their employees to delete the app, and the Biden campaign had their staffers delete their accounts. Trump has voiced his concerns, arguing the app is threat to national security.
As tensions between China and the United States have escalated significantly in the past few weeks, the Trump administration has taken a firmer stance against China’s egregious actions and policies than previous administrations. The State Department enforced the closure of the Chinese Consulate in Houston, Texas, with the argument this consulate was their home base for their national spy operation. But for Microsoft, this is a huge opportunity, as the popular social media app would make the company a competitor in the social media field. Furthermore, they are open about wanting to work with the federal government to protect Americans.
In a blog post, the company said, “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. Among other measures, Microsoft would ensure that all private data of TikTok’s American users is 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’s former CEO Steve Ballmer has said to critics about the deal that it would be hard to find a deep connection with Microsoft and the Chinese government. He told CNBC, “If Microsoft was tight and cozy with the Chinese government, Microsoft’s business would be bigger in China. If the Chinese market was as piracy-free as the rest of the world, if the Chinese market was as accepting of Microsoft’s enterprise services as the rest of the world, Microsoft would be really, I think, quite a bit bigger.”
Why this matters: Microsoft has avoided the same scrutiny from lawmakers over anti-trust issues. They avoided a tough Judiciary Committee hearing that scorched Amazon, Apple, Google, and Facebook. The acquisition of Microsoft would lead the company down a different path through its expansion into the social media space, which Ballmer said is important. TikTok has already proven its worth in the United States, and is growing. It would put Microsoft in the spotlight, however, over data security in the United States. But for the company, they are willing to work with lawmakers, the White House, and the president because of how much growth it would bring their corporation. Chinese internet users have said the ByteDance CEO is a “traitor” for even having talks with Microsoft about selling the company.