on September 14, 2020 shows the logo of the social network
application TikTok (L) and a US flag (R) shown on the screens of
two laptops in Beijing. – US tech giant Microsoft said on September
13 its offer to buy TikTok was rejected, leaving Oracle as the sole
remaining bidder ahead of the imminent deadline for the
Chinese-owned video app to sell or shut down its US operations.
(Photo by NICOLAS ASFOURI / AFP)
American tech giant Microsoft said Sunday its offer
to buy TikTok was rejected, leaving Oracle as the sole remaining
bidder ahead of the imminent deadline for the Chinese-owned video
app to sell or shut down its US operations.
TikTok is at the center of a diplomatic storm between Washington
and Beijing, and President Donald Trump has set Americans a
mid-September deadline to stop doing business with its Chinese
parent company ByteDance — effectively compelling a sale of the app
to a US company.
The Wall Street Journal and The New York Times reported that
Oracle had won the bidding war, citing people familiar with the
deal, although the company did not immediately confirm that to
AFP.
But two Chinese state media outlets — CGTN and China News
Service — said Monday that ByteDance will not sell TikTok to Oracle
either, citing unnamed sources.
The Oracle bid would need approval from the White House and
Committee on Foreign Investment in the United States, a source told
the Journal, with both parties under the belief it would meet US
data security concerns.
Microsoft had indicated at the beginning of August that it was
interested in acquiring TikTok’s US operations, but announced
Sunday that bid had been rejected.
“ByteDance let us know today they would not be selling TikTok’s
US operations to Microsoft,” it said in a statement.
“We are confident our proposal would have been good for TikTok’s
users, while protecting national security interests.”
In early August, Trump issued an executive order stating that if
a purchase agreement was not reached by September 20, the platform
would have to close in the United States.
Trump claims TikTok could be used by China to track the
locations of federal employees, build dossiers on people for
blackmail, and conduct corporate espionage.
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– Disputed dangers –
In late August, China’s commerce ministry published new rules
potentially making it more difficult for ByteDance to sell TikTok
to a US entity by adding “civilian use” to a list of technologies
that are restricted for export.
ByteDance had vowed to “strictly abide” by the new export
rules.
“We believe Microsoft would only buy TikTok WITH its core
algorithm which the Chinese government and ByteDance was not
willing to budge,” Wedbush analyst Daniel Ives said in a note.
“Given the need now to get a green light from Beijing after its
export rules were changed a few weeks ago, TikTok’s days in the US
likely are numbered with a shutdown now the next step,” the analyst
said.
Downloaded 175 million times in the United States, TikTok is
used by as many as a billion people worldwide to make quirky, short
videos on their cellphones. It has repeatedly denied sharing data
with Beijing.
Microsoft said it would have “made significant changes to ensure
the service met the highest standards for security, privacy, online
safety, and combatting disinformation.”
A deal with Microsoft could also have included Walmart, which
joined forces with the tech giant during negotiations.
Ives said that even with Microsoft out of the picture, “while
Oracle is technically the remaining bidder, without willing to sell
its core algorithm we see no TikTok sale on the horizon.”
“Oracle could be a technology partner, but a sale/divestiture of
the US operations for TikTok remains the focus.”
TikTok meanwhile has filed a lawsuit challenging the US
crackdown, contending that Trump’s order was a misuse of the
International Emergency Economic Powers Act because the platform is
not “an unusual and extraordinary threat.”
Controversially, Trump has demanded that the US government get a
cut of any deal, which critics contend appears unconstitutional and
akin to extortion.
The bidding for TikTok comes during a broader deterioration of
relations between the world’s top two economies in recent months,
with both exchanging fierce recriminations over trade, human
rights, and the origins of the coronavirus pandemic.
AFP
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