WASHINGTON: Holding back from his threat to ban
in America, US President Donald Trump has given Microsoft CEO Satya Nadella 45 days to complete a total acquisition of the Chinese short video app, after a phone conversation with the Indian-American executive who has led the tech giant to a trillion-dollar company after he took over in 2014.
Trump’s reversal of a ban that was to come on Saturday followed pressure from globalists within the Republican Party who felt such a strong-arm action would reflect poorly on the administration, particularly since TikTok has more than 100 million young users in the US, it’s third largest market after India and China. There was also the implicit threat of retaliation from China that would affect many American companies such as Apple, Tesla, and Microsoft itself, leading to an all-out trade war, besides inviting legal challenges.
A case was made for allowing Microsoft to continue its negotiations with TikTok, with any eventual acquisition involving the app’s complete split from the parent company in China, including transfer of all data to the US ByteDance, the Chinese company that owns TikTok, had initially planned to hold on a minority stake while selling most of its US operations, an idea that Trump rejected, wanting a total 100 per cent acquisition.
“Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury,” Microsoft said in a statement following Trump’s phone call with Nadella, adding that “Among other measures, Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States.”
Microsoft said there was no certainty a deal – which would involve a purchase of the TikTok service not just in the United States, but also in Canada, Australia, and New Zealand – but it was aiming to conclude the negotiations by September 15. “Microsoft appreciates the US Government’s and President Trump’s personal involvement as it continues to develop strong security protections for the country,” it added.
Microsoft had been talking to ByteDance even before Trump’s sudden rage against the foreign entity, ostensibly because some young Americans used the app to undermine his rally in Oklahoma, but now the clock is ticking for the
giant even as it is being cast a purchasing arm of the US government. The deal will be overseen and scrutinized by the Committee on Foreign Investment in the United States (CFIUS), a US government panel that can block any agreement if it is not in US national security interest
Microsoft original interest in TikTok was aimed at hauling itself up to be competitive with rivals such as
Facebook and Google
), in the one area it is perceived as a laggard – short format entertainment video business. Since he took over as CEO in 2014, the India-born Nadella, a graduate of Manipal Institute of Technology, has expanded Microsoft portfolio beyond its core strengths, making acquisitions ranging from professional networking company
for $ 26 billion to Swedish gaming company Mojang for $ 2.6 billion.
Ahead of Trump’s backing down, senior US administration officials had virtually signaled the end of TikTok in the US after the US President said he would sign an executive order banning the app in America.
“These Chinese software companies doing business in the United States, whether it’s TikTok or WeChat — there are countless more … are feeding data directly to the Chinese Communist Party, their national security apparatus,’ Pompeo said on Fox News Sunday. “President Trump has said ‘enough’ and we’re going to fix it and so he will take action in the coming days with respect to a broad array of national security risks that are presented by software connected to the Chinese Communist Party.”
But Republican Senators led by Lindsey Graham proved to have a greater influence on Trump – at least for now – than China hawks such as Pompeo and Trump’s trade advisor
. “To fans and users of#TikTok. I understand your concerns. However President Trump is right to want to make sure that the Chinese Communist Party doesn’t own TikTok and most importantly – all of your private data. What’s the right answer? Have an American company like Microsoft take over,” Graham tweeted, saying such a solution would be a “win-win.”