August 3, 2020–The Microsoft Corporation announced it plans to “move quickly” to purchase the widely popular video-sharing app TikTok from its China-based owner Bytedance.
The announcement came on Sunday after Microsoft CEO Satya Nadella spoke with U.S. President Donald Trump, who has threatened to ban the app over national security concerns. Microsoft said it intends to complete negotiations by September 15.
The fast-moving talks come as public officials are paying closer attention to digital apps that collect data from billions of users. It also highlights the current economic integration of the world’s two superpowers: the United States and China.
Data Collection and Security Concerns
With more than 2 billion downloads to date, TikTok is the among first Chinese internet-service to have a global reach. It is known mainly for the silly or funny videos its users share on its platform. In the past year, the app has come under fire for various reasons, including child privacy laws in the United States, censorship of political information unfavorable to China, and distribution of violent and pornographic content.
Increasingly the focus of concern has shifted to the use and the potential misuse of the data the app collects.
In December, the U.S. military instructed its personnel to delete the app from their devices amid “potential security risks associated with its use.” Other U.S. government agencies soon followed.
By June, India banned the mobile app, along with 58 others, saying “they are engaged in activities which are prejudicial to sovereignty and integrity of India.” It cited issues with national security and public order.
Specifically, the Indian Information Technology Ministry raised concerns that the apps were “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers” outside the country. The ministry said “hostile” elements outside India were compiling, mining and profiling the data in a way that threatens the country’s sovereignty and security.
U.S. Considers Ban
As Microsoft pursued negotiations, U.S. officials cited their concerns about the app and maintained that a U.S. ban is possible.
On Sunday, Secretary of State Mike Pompeo said TikTok along with WeChat are “feeding data directly to the Chinese Communist Party, their national security apparatus.” Data collected could include contacts, facial recognition patterns, addresses and phone numbers, he said in an interview with Maria Bartiromo on Fox News.
Microsoft Negotiations
The move by Microsoft shows that the company is looking to expand its reach beyond tech products and services to the field of social media.
Boosted by soaring sales as more and more activities shift online amid the global pandemic, the firm is in a strong position to make purchases.
The planned acquisition would apply to TikTok operations in the United States, Canada, Australia and New Zealand.
In its August 2 announcement, Microsoft promised to add “world-class security, privacy, and digital safety protections” to the app while maintaining user data in the United States. Furthermore, it said, “To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred.”
The Committee on Foreign Investment in the United States (CFIUS) is charged with reviewing and approving the deal.
The possibility of the sale pleased some U.S. leaders. “A U.S. company should buy TikTok so everyone can keep using it and your data is safe,” said Sen. Charles Schumer on Twitter.
But some administration officials continued to raise doubts.
“Maybe Microsoft could divest its Chinese holdings,” said White House Economic Adviser Peter Navarro in an interview on CNN. “Whose software does the People Liberations Army run on? Microsoft.”
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