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Bytedance refuses to sell TikTok US to Microsoft

14.09.2020
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On September 13, Microsoft posted the following statement on its Official Blog:
ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft. We are confident our proposal would have been suitable for TikTok’s users while protecting national security interests. 


Regarding the matter, Bytedance continues its close negotiations with Oracle, although the Chinese sources, close to the subject, say that it is not likely to win the bid either. However, no official comment was yet given by either Bytedance or Oracle themselves.
TikTok is a short-form video platform, developed by Chinese digital company Bytedance with its mission to “inspire creativity and create joy”. Created in 2017, it has gained much popularity all over the world, mostly known for viral dancing videos, but then suspected in posing risks of “blackmailing and conducting corporate espionage”.


In August, Trump’s administration released two executive orders, aimed to ban Bytedance, if not sold. The US President addressed the Chinese app as a “threat” to national security, as the app’s “data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information.” 


As the indicated date of shutdown (September 20) was coming closer, Donald Trump told the Reuters’ reporters during his trip to Michigan that “there will be no extension of the TikTok deadline. It will either be closed up, or they will sell it.” On September 11, the Chinese Foreign Ministry Spokesman Mr. Zhao Lijian expressed China’s opinion on the matter, having emphasized that “China opposes the unjustified suppression of certain non-US companies by abusing the US state power and stretching the concept of national security.” “The US has not only violated market principles and international rules but also negated the principles of market economy and fair competition that it has been priding itself on,” Zhao Lijian said.


Although going through such hard times, TikTok still enjoys growing popularity. Sensor Tower data shows that this August, the app was installed over 63,3 million times, which made it the first among non-game mobile apps worldwide.
When the issue of selling TikTok US operations was put on the table, the tech giants immediately appeared, seeking for cooperation. At the end of August two greatest supporters of Bytedance – Sequoia Capital and General Atlantic – entered the bidding together with Oracle, while Wallmart teamed with Microsoft on the bid. 


After Microsoft’s statement, the Wallmart expressed that the company was still interested in TikTok and would continue the discussions with the management of Bytedance and affiliated parties.
The relevant Chinese sources state that the company will not “hand out source code to any US buyer”, so not only Oracle but any US company are out of the competition. According to the Wall Street Journal, at the moment, the parent company Bytedance is communicating with the US government in order to avoid a full sale. 


Today TikTok covers more than 200 countries all over the world, with over 2 billion downloads worldwide. As per Sensor Tower, in the first and second quarters of 2020, TikTok surpassed Facebook, Instagram and Youtube in terms of installs. In the US, the app has over 91 millions of monthly active users, more than 1500 employees and thousands of partners. If shut down its US operations, the company will suffer losses of over 2 billion RMB, based on the company’s current market value. 


Sources:

https://blogs.microsoft.com/blog/2020/09/13/microsoft-statement-on-tiktok/
https://new.qq.com/omn/20200914/20200914A0884R00.html
https://www.whitehouse.gov/presidential-actions/executive-order-addressing-threat-posed-tiktok/
https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/t1814379.shtml