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The big picture: As the geopolitical pressure ratchets up on TikTok and its parent company ByteDance, there's talks of President Trump moving to force ByteDance to divest itself of the popular social app. More interestingly, Microsoft is reportedly kicking the tires on buying it from ByteDance. The Redmond software giant doesn't have a major presence in social media outside of the professional network LinkedIn. TikTok could give it one.
Update (Aug 2): It's been a busy weekend with back and forths of what the future of TikTok will look like, if any, in the United States. The rumor of Microsoft taking over the social app has now been confirmed by the software giant, who has made an official statement saying that following a conversation between CEO Satya Nadella and President Trump, Microsoft plans to continue discussions to purchase TikTok.
The company's intent is to move swiftly to complete acquisition discussions with ByteDance by mid September, while remaining in communication with the U.S. government and make the takeover subject to a complete security review.
Microsoft has clarified that the preliminary proposal involves a purchase of TikTok in the United States, Canada, Australia, and New Zealand. Under the new structure, Microsoft is proposing to add a layer of "world-class security, privacy, and digital safety protections." to ensure transparency to users and security oversight by governments in these countries.
The original story follows below:
Multiple sources suggested late Friday that Microsoft was in talks to buy TikTok, the popular video app owned by Chinese tech company ByteDance. A potential acquisition from Microsoft seemed to stem from reports that President Trump would order ByteDance to sell its US operations.
TikTok evolved from ByteDance's Douyin app which was primarily aimed at the Chinese market, before merging with the app musical.ly which brought TikTok to a worldwide audience. Since then the app has exploded in popularity and has subsequently attracted the ireful gaze of US lawmakers and regulators.
As TikTok has risen in popularity, the app has been increasingly put under the microscope over concerns for privacy and national security. Regarding privacy, the app has already been caught copying iOS' clipboard contents, and Reddit CEO Steve Huffman criticized the app, calling it "fundamentally parasitic." TikTok also has a history of controversial data collection practices.
Microsoft’s buying TikTok? https://t.co/W5nI7zJWZ1— Tero Alhonen (@teroalhonen) July 31, 2020
TikTok has also been caught in the middle of the back and forth between the US and China, and over the alleged ties that ByteDance has to the Chinese government. TikTok scrapes a shocking amount of data on its users, and under the China Internet Security Law, ByteDance would have to surrender that data if the Chinese government requested it. However, TikTok maintains that its servers aren't based in China, and as such, aren't subject to such laws.
TikTok is under review by the Committee on Foreign Investment in the United States (CFIUS), and there are rumors that ByteDance could be added to the Bureau of Industry and Security (BIS) Entity List. That's the same list that Huawei found itself on, and would mean ByteDance would be cut off from American IP and technology.
Microsoft acquiring TikTok would likely go a long way in alleviating western fears of privacy and national security. ByteDance has made its own attempts at lessening these concerns, including appointing former Disney executive, Kevin Mayer, as its CEO and even floating the idea of American investment companies buying back the company from ByteDance.
Given its sheer popularity, especially with young crowds, TikTok is likely to continue in a controversial spotlight unless something big happens. TikTok has been banned by the Navy, Army, and the TSA. Joe Biden's presidential campaign staff was recently forbidden from using the app on work and personal devices, and the list could go on and on.