Initiating negotiations, President Donald Trump has agreed to give 45 days to Chinese company ByteDance. Trump expects the company to negotiate a deal to sell TikTok to Microsoft Corporation, reported Reuters.
Earlier on Friday, Trump said he was in plans to ban TikTok from the United States after dismissing the idea of a sale to Microsoft. US officials have been vocal regarding the threat posed by TikTok due to accusations against its data policy.
Following discussions with Trump, Microsoft CEO Satya Nadella said in a statement that the company would continue negotiations to acquire American operations from ByteDance, and it is aiming to reach a deal by September 15.
After the TikTok ban in India, talks about following the same started in the U.S. But Trump’s new deadline is confusing many, as it is not clear why he changed his mind. Prominent Republic lawmakers have put out statements urging him to back the sale of TikTok in the last two days.
The Committee on Foreign Investments in the United States (a government panel with the power to block any agreement) will oversee the TikTok and the Microsoft negotiations said reported Reuters.
“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,” said Microsoft in a statement released.
Under the deal, Microsoft is in the plan to overtake TikTok operations in the United States, Canada, Australia, and New Zealand. The company said it will ensure that all private data of TikTok’s American users would be transferred back to the United States.
The company may invite other American investors to acquire minority stakes. About 70 percent of the parent company ByteDance comes from the United States. At present, the ByteDance is valued at more than $50 billion.
It is not clear how much Microsoft will have to pay for TikTok to acquire its operations. However, U.S. pressure is expected to lower the price tag for the sale of ByteDance. The app is fighting the battle due to growing privacy concerns and content scrutiny policies.
The main issue in the negotiations will be separating the TikTok connection from ByteDance. The separation of technology, infrastructure, and access will address American concerns about the personal data of its citizens.
In recent times, the US has increased its scrutiny over the apps that handle personal data, especially if they involve US military and intelligence departments. Ordering the divestment of social media app TikTok is not the first time the US government has taken action.
The CFIUS divestment order led to Chinese gaming company Beijing Kunlun Tech Co Ltd selling Grindr LLC for 620 million, Grindr is a popular dating app bought by the Chinese company back in 2016. In 2018, CFIUS forced China’s Ant Financial to scrap its plan to buy MoneyGram.