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The talks take place at a time when ownership of TikTok through a Chinese company depends on the White House and lawmakers.
By Mike Isaac, Ana Swanson and Alan Rappeport
SAN FRANCISCO – TikTok, the Chinese-owned video app that has been monitored through the Trump administration, is in talks to sell to Microsoft and other corporations as President Trump weighs the difficult moves that oppose the company, adding that he forced TikTok to take component tactics with his parent company. company, ByteDance, said other people wisely from the conversations.
The strict Foreign Investment Committee in the United States, or Cfius, tested the acquisition of ByteDance from Musical.ly in 2017, an application that eventually became TikTok. The committee ordered ByteDance to deliver TikTok, and the government is negotiating the terms of the separation, according to a user familiar with the administration’s plans, who spoke under anonymity status. White House officials have said TikTok may pose a risk to national security because of its Chinese property.
On Friday, Treasury Secretary Steven T. Mnuchin, who heads the committee, informed the chairman of the divestment plan. But it is unclear what the president will do, adding whether the United States will apply a divestment order to all U.S. operations in TikTok and whether its movements will also be global enforcement activities.
Trump is comparing several other avenues of action, adding an executive order that can use the broad powers of the International Emergency Economic Powers Act to ban certain foreign programs in U.S. app stores. The Trump administration has also thought of adding TikTok’s parent company to the so-called “list of entities,” which would prevent it from buying American products and without a special license, other people familiar with the matter said. Discussions are expected to continue this weekend.
In his comments Friday, Trump told reporters there were “two options” with TikTok, adding “ban it.” He added: “But a lot of things are happening, so let’s see what happens. But we’re looking for a lot of opportunities compared to TikTok.”
Later Friday, Trump said he planned to take action Saturday. He added that he needed to allow a U.S. company to buy TikTok’s U.S. operations.
It is not known how complex TikTok’s discussions are to sell to Microsoft and other corporations, however, property substitution is very important to the application. The United States is one of TikTok’s major markets. Continuing to function in the country is a priority.
TikTok discussed other scenarios to dispel the considerations of U.S. officials. In one scenario, non-Chinese investors such as Sequoia Capital, SoftBank and General Atlantic can simply buy a majority stake in the App from ByteDance, others close to the discussions said.
Any deal would be expensive. ByteDance’s valuation recently stood at about $100 billion, according to the study company PitchBook.
In a statement, TikTok did not respond to Trump’s comments or any negotiations on the deal. A spokeswoman said the app is confident in its long-term good fortune and pledged to protect the privacy and protection of its creators so that they can “bring joy to families.”
Microsoft declined to comment.
Discussions between Microsoft and TikTok have already been reported through Fox Business. Bloomberg previously reported that President Trump is about to announce an order forcing ByteDance to sell TikTok’s operations in the United States.
Advances reflect the growing tension in TikTok. For months, Trump lawmakers and management have been asking if the app can be influenced by the Chinese government, adding possible requests to censor the percentage of curtains on the platform or the percentage of knowledge of American users with Chinese officials.
“It is well established at this point that programs that have granular access to user knowledge and location and other sensitive non-public knowledge are on Cfius’ radar and can cause significant national security issues,” said John P. Kabaelo, a lawyer representing corporations in Cfius magazines.
TikTok collects similar amounts of cell phone knowledge than other social media apps, security experts said. But Christoph Hebeisen, director of security intelligence studies at Lookout, a company that focuses on mobile device security, said that U.S. officials are involved in the app because “if the parent company is Chinese, which in this case, are under Chinese security law.”
He added: “I don’t think it’s an exaggeration to think that if China were to look for this data, it would have the means to do so.”
TikTok is used through more than 800 million people worldwide and is very popular with young people. Users can easily upload music and other audio tracks to their videos, which then travel virally on Facebook and Twitter.
As the most popular app, TikTok’s Chinese offices thousands of employees. The company has also maintained an American presence, with offices in New York and Los Angeles.
In reaction to Washington’s thorough review, TikTok hired a senior Disney executive, Kevin Mayer, in May to be its leading executive. The app is also committed to publicly revealing the set of rules that drive your application.
In addition, TikTok has strengthened its lobbying operation in Washington. With the help of leading investors such as SoftBank and General Atlantic, he hired the former director of the Internet Association, an industry organization that represents corporations such as Google and Facebook, and members of prominent members of Congress.
The company has recruited more than 35 lobbyists, David J. Urban, former West Point classmate of Secretary of State Mike Pompeo and Trump’s best friend. The company’s lobbyists highlighted TikTok’s U.S. investors and Mayer’s hiring.
Feeling weak, rivals like Facebook have focused on lawmakers’ distrust of TikTok’s Chinese ownership. Mark Zuckerberg, Facebook’s executive leader, said American corporations like his would suffer if the government puts them at a competitive disadvantage off TikTok.
On Wednesday, when ceas of Amazon, Apple, Facebook and Google testified before Congress about their market power, Mayer defended TikTok while committing to do so through the U.S. government.
“The industry as a whole has been examined, and rightly so. However, we have won even greater scrutiny because of the Chinese origins of the company,” he said in a statement. “It is imperative to show users, advertisers, creators and regulators that we are guilty and committed members of the U.S. law-abiding network.”
In the past, Cfius ordered corporations to divest their acquisitions. Congress had expanded the panel’s jurisdiction in 2018 to include reviews of transactions involving “sensitive user awareness.” The substitution was due to fears that foreign ownership of knowledge collected through programs and internet sites could threaten national security.
In 2019, Trump’s management ordered a Chinese company to relinquish control of Grindr, the gay dating app, for fear that China might use the data to blackmail U.S. officials. Chinese company Beijing Kunlun Technology said it had reached an agreement with Cfius this year to sell the app to an investment group, San Vicente Acquisition LLC. Reuters later reported that the client had links to the Chinese owner.
Mike Isaac back from San Francisco and Ana Swanson and Alan Rappeport from Washington. David McCabe and Julian Barnes contributed to the Washington report.
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