Trump’s announcement followed frantic negotiations on Friday between the White House, ByteDance and potential buyers of TikTok, including Microsoft
US President Donald Trump said on Friday he would sign an executive order as soon as Saturday to ban TikTok in the United States, ratcheting up the pressure on the popular short-video app’s Chinese owner to sell it. The move would be the culmination of US national security concerns over the safety of the personal data that TikTok handles. It would represent a major blow for TikTok’s owner, Beijing-based ByteDance, which became one of only a handful of truly global Chinese conglomerates thanks to app’s commercial success.
Trump’s announcement followed frantic negotiations on Friday between the White House, ByteDance and potential buyers of TikTok, including Microsoft. They failed to produce a deal that would result in the Chinese company shedding the app’s US operations, according to people familiar with the matter. The talks are expected to continue in the coming days.
While Microsoft already owns professional social media network LinkedIn, it would face fewer regulatory hurdles in acquiring TikTok than its more direct competitors, such as Facebook, one of the sources said.
But ByteDance’s valuation expectations for TikTok of more than $50 billion, and its insistence on retaining a minority stake in the app complicated deal talks, another source said.
“Not the deal that you have been hearing about, that they are going to buy and sell… and Microsoft and another one. We are not an M&A (mergers and acquisitions) country,” Trump said.
It was not immediately clear what authority Trump had to ban TikTok, which has up to 80 million active monthly users in the United States. It was also not clear how the ban would be enforced and what legal challenges it would face.
ByteDance, Microsoft and the US Treasury Department, which chairs the government panel that has been reviewing ByteDance’s ownership of TikTok, declined to comment.
“While we do not comment on rumours or speculation, we are confident in the long-term success of TikTok,” TikTok said in a statement.
As relations between the United States and China deteriorate over trade, Hong Kong’s autonomy, cyber security and the spread of the novel coronavirus, TikTok has emerged as a flashpoint in the dispute between the world’s two largest economies.
ByteDance was valued at as much as $140 billion earlier this year when one of its shareholders, Cheetah Mobile, sold a small stake in a private deal, Reuters has reported. The startup’s investors include Japan’s SoftBank Group.
The bulk of ByteDance’s revenue comes from advertising on apps under its Chinese operations including Douyin – a Chinese version of TikTok – and news aggregator app Jinri Toutiao, as well as video-streaming app Xigua and Pipixia, an app for jokes and humorous videos.
Some of the company’s other overseas apps include work collaboration tool Lark and music streaming app Resso.
TikTok CEO Kevin Mayer, a former Walt Disney executive, said in a blog post on Wednesday that the company was committed to following US laws, and was allowing experts to observe its moderation policies and examine the code that drives its algorithms.