Robert Sawatzky
Aug 3, 2020

Microsoft deal to buy TikTok in US would include ANZ and Canadian markets

A 'quickly moving' deal aims to address security concerns from governments in these markets over user information and privacy.

Microsoft deal to buy TikTok in US would include ANZ and Canadian markets

US software giant Microsoft says it is "moving quickly" on a deal with TikTok's Chinese parent company ByteDance to buy not just its US operations, but also those in Australia, New Zealand and Canada. The proposed deal aims to keep the video-sharing platform alive in markets where governments have serious security concerns over users' security and privacy. 

Microsoft CEO Satya Nadella met with US President Donald Trump on Sunday to discuss the deal and the President's concerns over TikTok's current US operations and the potential for user information to be shared with the Chinese government. 

In a corporate blog post afterwards, Microsoft says "it fully appreciates the importance of addressing the President’s concerns" including the transferring of all American user data to the United States and deleting any backup data from servers outside the country. It added that "the operating model for the service would be built to ensure transparency to users as well as appropriate security oversight by governments in these countries."

Microsoft, which is also the parent company of LinkedIn, says it is aiming to complete its discussions with ByteDance no later than September 15, 2020.  While Microsoft would own and operate TikTok in these four markets, the company may also invite other American minority investors to participate, the blog post stated. ByteDance was unable to provide Campaign with a statement on the Microsoft proposal, but a TikTok spokesperson reiterated that "we are confident in the long-term success of TikTok." 

This deal replaces a proposal rejected earlier by The White House under which ByteDance would retain a minority stake in TikTok's US business.  ByteDance's reluctance to sell its US operations completely was suggested in a report by the South China Morning Post on Sunday, saying the Chinese company preferred an independent spin-off to a direct sale to Microsoft. 

But US President Donald Trump has appeared dead set against Chinese ownership, publicly vowing to ban the popular app while on board Air Force One on Friday. Over the weekend, a senior trade official told Fox News that Trump was likely to take action on TikTok by Monday, comments that were echoed by US secretary of state Mike Pompeo on Fox News on Sunday. 

Australian investigations

Meanwhile, the Australian Broadcasting Corporation is reporting that the federal government in Canberra is stepping up its scrutiny of TikTok as well over similar security concerns. 

The ABC says Prime Minister Scott Morrison has asked Australia's intelligence agencies to investigate potential security threats from Tik Tok while the Department of Home Affairs considers how to mitigate any privacy or data security risks uncovered.  

TikTok & China's response to US criticism

TikTok has long argued it does not share international user data with Beijing and maintains it respects user privacy. In a statement to Campaign on Monday, a TikTok spokesperson reiterated it was "committed to protecting [user] privacy and safety as we continue working to bring joy to families and meaningful careers to those who create on our platform."

On Saturday, TikTok's US general manager Vanessa Pappas posted a video message by notification to all US users, saying: "We're not planning on going anywhere". But in the message (shown below), Pappas' response takes a softer approach,  thanking users for their support, noting the jobs and content initiatives the platform has funded in the US. 

@tiktok

A message to the TikTok community.

♬ original sound - tiktok
 

Meanwhile, Chinese reaction to the weekend's events has been sharp. The editor-in-chief of Chinese state media publisher Global Times slammed the " hunting and looting of TikTok by the US government" as ploy to force ByteDance into selling low out of desperation. It argued the US is less concerned about national security whereas "the real issue that truly concerns Washington is the ability of Huawei and TikTok to challenge the high-tech hegemony of the US."

TikTok has been been in the crosshairs of a political battle for weeks, riding out considerable upheaval across Asian markets following its ban in India, a potential ban in Pakistan, and switching its platforms in Hong Kong following the introduction of a new national security law from Beijing. 

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