The clock is ticking
on TikTok after potential avenues to avoid President Donald Trump’s promised
ban on the Chinese app appeared to dry up as the week began.
Microsoft Corp. MSFT, announced Sunday that its bid for
TikTok had been turned down, with no explanation as to why the deal was
rejected. After reports that Oracle Corp. ORCL, would become a “trusted tech
partner” for TikTok parent Bytedance, a Chinese state-affiliated news source
reported that Bytedance will “not sell TikTok’s U.S. operations to Oracle.”
Trump originally issued a Sept. 15 deadline for TikTok’s
U.S. operations to be sold to an American company or be banned, but his
executive order established a Sept. 20 deadline. Microsoft – which had
attempted to bring Walmart Inc. WMT, into the deal – and Oracle were reported to be
the only suitors until Microsoft publicly threw in the towel Sunday afternoon.
“ByteDance let us know today they would not be selling
TikTok’s U.S. operations to Microsoft,” Microsoft said. “We are confident our
proposal would have been good for TikTok’s users, while protecting national
security interests. To do this, we would have made significant changes to
ensure the service met the highest standards for security, privacy, online
safety, and combatting disinformation, and we made these principles clear in
our August statement. We look forward to seeing how the service evolves in
these important areas.”
The sticking point to a sale has been TikTok’s underlying
algorithm, which may not be able to be transferred to a U.S. company under new
Chinese tech-export rules.
Reuters reported last week that it’s also possible that the
Chinese government prefers no sale at all, as to not want to appear weak in the
face of U.S. pressure.
TikTok, the wildly popular video-sharing app, has more than
100 million users in the U.S., but the Trump administration has claimed the
app’s Chinese ownership makes user data vulnerable to misuse by the Chinese
government.
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