Microsoft has confirmed its intent to purchase TikTok from its Chinese parent-company amongst threats of a ban from US President Trump.
According to a release from Microsoft, “Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States,” signalling its intention to secure a multi-billion-dollar acquisition.
Microsoft and TikTok’s parent company ByteDance have submitted a notice of intent for preliminary proposals for the purchase, which would cover TikTok’s services across the U.S., Canada, Australia and New Zealand.
Microsoft’s CEO, Satya Nadella has said he has talked with President Trump about the purchase, and stated that any acquisition would still be “subject to a complete security review and providing proper economic benefits to the United States, including the United States’ Treasury.”
Trump has previously said that any deal involving TikTok must include “a very substantial portion of that price going to have to come into the Treasury of the United States.”
TikTok has issued a statement saying that the video-sharing platform is “committed to continuing to bring joy to families and meaningful careers to those who create on our platform as we build TikTok for the long term.”
“TikTok will be here for many years to come,” it added.
No official figure has been placed on the potential deal, but analysts have suggested that it will be in excess of tens of billions; some investors have put the price at $50 billion.
For reference, Facebook purchased Whatsapp and Instagram for USD $19 billion in 2014 and $1 billion in 2012 respectively.
After hearing news of the potential deal from Microsoft’s CEO, Satya Nadella, Trump said, “I did say that if you buy it, whatever the price is that goes to whoever owns it, because I guess it’s China essentially, I said a very substantial portion of that price is going to have to come into the Treasury of the United States because we’re making it possible for this deal to happen.”
“Nobody else would be thinking about [that] but me, but that’s the way I think,” Trump said.
Microsoft also added in reference to security fears of the Chinese-owned app that “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.”
“Amongst 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.”
We reported just a few days ago that the U.S. Secretary of State, Mike Pompeo had offered public criticism toward TikTok and it’s parent-company ByteDance for acting as part of the government’s data collection methods, stating that it was guilty of “feeding data directly to the Chinese Communist Party.”
Just days ago, President Trump told reporters on Air Force One that “as far as TikTok is concerned, we’ll be banning them from the United States.”
According to a report from IT News, “when Trump told reporters he planned to ban TikTok as soon as that weekend, downloads for four TikTok rivals – Triller, Byte, Dubsmash and Likee – all spiked on Sunday.”
“Daily downloads in the United States for Triller on Sunday almost doubled to nearly 62,000,” IT News added.
That same report states that the Facebook-owned app Instagram is due to release its direct competitor to TikTok called ‘Reels’, which was first tested in Brazil last november.
As it stands, TikTok is still subject to an investigation from Australia’s Department of Home Affairs which will look at a number of ways to manage privacy, data and information security risks associated with the Chinese-owned app.