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| Trump Gave Microsoft 45 Days for TikTok Deal |
After the negotiation to take over TikTok fell through last Friday, July 31, Microsoft was given 45 days by US President Donald Trump to secure a deal. The ultimatum came after Trump threatened to ban the popular video app amid security concerns. It is the president’s latest move to put pressure on TikTok.
Continued Negotiations
Previously on Friday, Trump had announced that he was going to ban TikTok. However, a discussion between Trump and Microsoft CEO Satya Nadella, the negotiations continued. A deal is aimed to be reached by September 15.
The deadline was put by the Committee on Foreign Investment in the United States (CFIUS) on Microsoft and ByteDance, the Beijing-based start-up that owns TikTok. The CFIUS monitors deals for possible national security risks.
TikTok is not the only app that has been subject to mounting scrutiny by the US, especially if the app involves US federal employees or military personnel. In March this year, Grindr was sold by Beijing-based Kunlun Tech Co Ltd to US-based San Vicente Acquisition Partners. The $620 million purchase was under the supervision of CFIUS, which had told Grindr to divest.
China Daily, the Chinese state newspaper, accused Washington of committing a “witch hunt” on TikTok without any proof of its threat to US national security.
Concerns Over Young Voters
Allegedly, Trump repelled his threat to ban TikTok after pressure from his advisors and members of the Republican party. Some Republican lawmakers had been urging him to push the deal between TikTok and Microsoft.
The video app’s user base mostly consists of teenagers and young people. Therefore, banning the app risks Trump’s losing young supporters in the upcoming presidential election in November. The ban would also incite legal challenges with TikTok’s operations.
Prospects for Microsoft
Microsoft proposed that it would control TikTok’s operations in the United States, Canada, Australia, and New Zealand. It would make certain that American users' personal data is kept in the US.
The price at which Microsoft is planning to purchase TikTok is unclear. ByteDance expected more than $50 billion for the app, although it could go lower with the US pressure to divest it. ByteDance itself is valued at $140 billion.
Microsoft’s statement indicated that other American investors may enjoy a portion of TikTok’s shares. However, it makes clear that the company cannot guarantee a successful takeover. Microsoft also declines to give more information until the negotiation is finished.
