The future of TikTok in the US: less than 2 months to reach a deal

Like many other Chinese tech companies, TikTok is being grilled by the US administration. As President Donald Trump threatened to ban TikTok in the US, Microsoft announced it will round up discussions with ByteDance about the purchase of the social media platform.

The tech cold war between China and the US is accelerating, and TikTok is now in the spotlight.

“TikTok has become the latest target, but we are not the enemy,” said Kevin Mayer, the CEO of TikTok. ByteDance is now being forced to sell its American TikTok business to avoid a ban in the US.

"As far as TikTok is concerned, we're banning them from the United States," Mr. Trump told reporters on Friday. 

He said he would sign an executive order on Saturday, but instead he backed Microsoft in pursuit of buying TikTok from its Chinese parent company ByteDance. The company offered to sell its American business to avoid the ban in the US, as it is one of the biggest TikTok markets.

Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States, the company said in a press release.

As the US President Donald Trump voiced his concerns about the safety of TikTok, Microsoft announced it is prepared to complete the discussions with ByteDance no later than September 15, 2020.

India banned TikTok in June along with 58 other mobile Chinese apps over the concerns that these apps are secretly collecting information from people’s phones.

“The two companies have provided notice of their intent to explore a preliminary proposal that would involve a purchase of the TikTok service in the United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets,” the company stated in the press release.

Microsoft may invite other American investors to participate on a minority basis in this purchase. Also, there’s no guarantee that Microsoft will be able to purchase TikTok.

“These discussions are preliminary and there can be no assurance that a transaction which involves Microsoft will proceed. We do not intend to provide further updates until there is a definitive outcome to our discussions,” the company said in a statement.

TikTok is a short video-based social platform with around 800 million monthly users, most of whom are based in the US and India.

As with other Chinese apps, there’s a concern that data collected by TikTok might be passed on to the Chinese government.

At the end of July, Kevin Mayer, the CEO of TikTok, said in a statement that he is confident about TikTok’s future success in the US market.

“We are willing to take all necessary steps to ensure the long-term availability and success of TikTok. The one thing that will not change is our commitment to ensuring that TikTok remains a safe and secure platform for the tens of millions of American families that derive joy from it,” said Kevin Mayer.