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Microsoft wants to buy TikTok as White House puts Chinese apps on warning

Wendy Lee, Los Angeles Times on

Published in News & Features

Microsoft on Sunday said it is exploring buying TikTok in four markets including the U.S. after the Trump administration raised national security concerns regarding the app's ties to China.

The disclosure comes as TikTok faces increasing pressure from the Trump administration, which has called the popular app a national security threat and announced plans to ban it.

Microsoft said it is in talks with the app's Chinese parent company, ByteDance, to take control of TikTok in the U.S., Canada, New Zealand and Australia. If the deal is finalized, Microsoft plans to bring all American user data to U.S. servers and remove data backed up in foreign countries. Currently, TikTok stores U.S. user information in the U.S. and backs it up in Singapore.

Microsoft said that it hopes to complete the discussions with ByteDance no later than Sept. 15. But it is possible that a deal may not go through.

"These discussions are preliminary and there can be no assurance that a transaction which involves Microsoft will proceed," Microsoft said in a statement.

An acquisition by a U.S. company could help TikTok shed some of the scrutiny surrounding ByteDance. Some industry observers have raised concerns over whether the Chinese government could compel ByteDance to hand over information about U.S. users.

 

"This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections," the Microsoft statement read. "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."

TikTok says it has not and will not give U.S. user data to the Chinese government. The company said that later this year it will open a transparency and accountability center in Culver City where outside experts can examine its content moderation practices and see the code that powers its algorithms.

Analysts said it makes sense that Microsoft would be interested in buying TikTok because social media is a weak spot for the Washington company, which counts among its specialties workplace and personal software, cloud-computing, consumer-facing devices and gaming.

"It sends a message to the world that they are not the Microsoft of old and we're all about making big bets," said Gene Munster, a managing partner for venture capital firm Loup Ventures.

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