Update: The Wall Street Journal reports from their sources that Microsoft have “paused” their negotiations. As both Reuters and the Wall Street Journal are relying on anonymous sources, it is impossible to tell who is using the more trustworthy source. The Wall Street Journal article appears to be the most recent article on the matter.
Microsoft are reportedly buying the entire US operation of TikTok, after US President Donald Trump threatened to ban the app from the US entirely.
TikTok is a video sharing app that debuted in 2016; and quickly grew to prominence as people uploaded short comedy skits, dance routines, and singing. By July 2020, it had an estimated 800 million active monthly users, making it the seventh most popular social network.
However, many took issues with the app’s owner ByteDance- a Chinese company. This unsurprisingly lead to censorship of images and videos from the Hong Kong protests, and other subjects and information the Chinese government does not approve of.
This lead to concerns by US politicians of censorship occurring for users in the US. A US teenager attempting to spread awareness of Uighur Muslims being sent to Chinese re-education camps was banned from the platform, and leaked TikTok moderator guidelines revealed that content could be marked as “not recommended” and “not for feed.”
Despite these above incidents, TikTok spokespersons denied any censorship was occurring. Concerns were further compounded by the privacy concerns for most apps, and especially those from China; frequently accused of collecting, using, and selling private data of users without their consent or knowledge.
President Trump had banned Huawei technology being sold in the US via an executive order, and more recently issued an executive order for “Preventing Online Censorship” on social media platforms. Combined with threats made by President Trump to ban the app, many felt TikTok’s days were coming to an end [1, 2, 3, 4, 5].
On July 31st, President Trump told reporters aboard Air Force One that “As far as TikTok is concerned, we’re banning them from the United States.” He also reportedly (in The Hill’s words) “signaled” he was not supportive of TikTok being acquired by a US company. There had been prior reports that Microsoft were interested in purchasing TikTok from ByteDance.
A TikTok spokesperson said in a statement that “TikTok US user data is stored in the US, with strict controls on employee access. TikTok’s biggest investors come from the US. We are committed to protecting our users’ privacy and safety as we continue working to bring joy to families and meaningful careers to those who create on our platform.”
Now, Reuters reports from their sources (“two people familiar with the matter“) that ByteDance are divesting the US operation of TikTok to Microsoft. They also report that while ByteDance had previously sought to keep a minority stake in the US side of TikTok, this was rejected by the White House.
Investors will reportedly be given the chance for minority stakes in the business; with 70% of ByteDance’s non-Chinese investors being based in the United States. The White House reportedly declined to comment if President Trump would accept this offer, and Microsoft did not respond for a request to comment.
This is Niche Gamer Tech. In this column, we regularly cover tech and things related to the tech industry. Please leave feedback and let us know if there’s tech or a story you want us to cover!