Microsoft said to be in talks to buy TikTok, as Trump weighs curtailing app

  • >>Mike Isaac, Ana Swanson and Alan Rappeport, The New York Times
    Published: 2020-08-01 12:37:06 BdST

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TikTok, the Chinese-owned video app that has been under scrutiny from the Trump administration, is in talks to sell itself to Microsoft and other companies as President Donald Trump weighs harsh actions against the business, including forcing TikTok to divorce itself from its parent company, ByteDance, said people with knowledge of the discussions.

The powerful Committee on Foreign Investment in the United States, or CFIUS, has been examining ByteDance’s 2017 purchase of Musical.ly, an app that morphed to become TikTok. The committee has decided to order ByteDance to divest TikTok, and the government is engaged in negotiations over the terms of the separation. White House officials have said TikTok may pose a national security threat because of its Chinese ownership.

But it remains unclear what the president will do, including whether the US would apply a divestment order to all of TikTok’s US operations and whether its actions would affect the app’s global business as well.

Trump is weighing other courses of action, including an executive order that could use the powers of the International Emergency Economic Powers Act to bar certain foreign apps from US app stores. The administration has also considered whether to add TikTok’s parent to an “entity list,” which would prevent it from purchasing US products and services without a special license.

In comments Friday, Trump told reporters that there were “a couple of options” with TikTok, including “banning” it. He added, “But a lot of things are happening, so we’ll see what happens.”

Later Friday, Trump said he planned to take action as soon as Saturday. He added that he was not leaning toward allowing an American company to buy TikTok’s US operations.

It’s unclear how advanced TikTok’s talks to sell itself to Microsoft and other companies are, but changing ownership is crucial for the app. The United States is one of TikTok’s major markets, so continued operations in the country are a priority.

TikTok has discussed other scenarios to alleviate concerns by US officials. In one scenario, non-Chinese investors like Sequoia Capital, SoftBank and General Atlantic could purchase a majority stake in the app from ByteDance, people familiar with the discussions have said.

Any deal would likely be expensive. ByteDance’s valuation recently stood at around $100 billion, according to the research firm PitchBook.

In a statement, TikTok did not address Trump’s comments or any deal talks.

Microsoft declined to comment.

 

c.2020 The New York Times Company