TikTok is on the verge of being banned from the United States of America if they do not secure an agreement to sell off the companies assets including their algorithm to a US-based company. Companies like Microsoft, Oracle had submitted their bid and lined up to grab this opportunity. Trump’s administration had provided the Chinese application 45 days to secure a deal, which is about to end. Microsoft had been the leading company in the race from the beginning and have been quite confident that they will grab the deal throughout this period. However, news emerged from several sources that the Chinese company ByteDance, the parent company of TikTok has chosen Oracle over Microsoft as a suitor to hand over the application and the technology that comes with it.
On Sunday, the 13th of September, Microsoft announced that its bid to acquire the application was rejected by the Chinese company. Not even a week remains of the deadline for the Chinese company. Donald Trump, the president of the United States, had said that they would ban TikTok from the country if they fail to choose a company to hand over their application. The whole process must be completed by 20th September 2020.
Several red flags prompted the United States government to take this decision. They said that the data received from the application was being handed over to the Chinese communist government, who used the data to spy over the USA. However, the Chinese company had denied all the allegations from the beginning and also had added that their data are stored outside the borders of China. However, the United States government did not back off from the decision and stood firm on their accusation that the data are being funneled to the Chinese government. The Chinese company is even suing to stop the ban on the application.
Details about the deal have not yet been put out by either of the company. It is still unclear whether the acquisition will only be of TikTok’s US division or will comprise of TikTok’s rest of the world.
Committee on Foreign Investment in the United States, also known as CFIUS, a United States government group chaired by the Treasury Secretary that studies, mergers for national-security reasons, would review the deal between then two companies. The president of the country also has the power to approve or disapprove of the deal. However, Donald Trump has already said that any deal for the acquisition of the short video making application will have full support from the United States government and expects that the company would part a substantial amount of the deal with the United States treasury. Also, the president of the United States has praised the company Oracle saying that they are fully capable to handle the acquisition.
Microsoft said on Sunday that ByteDance had informed them that they would not sell TikTok’s US division to the conglomerate. The tech giant commented that they thought were confident that their proposal would have been good for TikTok’s users while protecting national security interests. They added that it “would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation.”
The short video making Chinese application has been largely popular all around the world for quite some time. It boasts of around 700 million users in the world and of around 100 million users in the United States alone. The main concern on the application is because of its Chinese ownership. India has also banned the application from its PlayStore and AppStore a few weeks back restricting the largest user base of the application form using the application. The step was taken after disputes between the armies of the two nations on the border.
For the United States, the trade war between the two countries has been at large for quite some time. The United States government has also banned the telecom equipment makers Huawei and flagged Chinese businesses like ZTE, WeChat along TikTok over concern that they pass on US user data to the Chinese government which they use to spy over the United States. Other than breaching the privacy of the users, an application like TikTok is also accused of censoring data or videos that hurt the Chinese sentiments on the instructions of the Chinese government. The company denied these allegations completely.
In the last week of August, the Chinese government laid out new laws that stop the China-based companies from selling off their technology. This includes the artificial intelligence system TikTok uses to choose which videos to spool up to its users, which is also one of the most unique and main features of the application. Therefore, any deal that would be made by ByteDance would need a license from the Chinese government. This added step complicates the deal even further.