TikTok for the USA: Who bids higher?
The popular TikTok app has become the apple of discord between China and USA. In recent declarations the north American president, Donald Trump, assured that the US will censore the app in his country if it doesn’t sell its operations in United States before the 15th of September.
So far there are two opponents bidding for TikTok. The contenders who could buy the rights to the popular Chinese app for the US nation are Twitter and Microsoft.
TikTok could belong to Twitter
The most recent party interested in acquiring TikTok’s US operations is Twitter. Sources close to the microblogging network revealed this fact to Reuters.
The only drawback to this purchase operation would be money. Twitter has a market capitalization of approximately 30 billion dollars. This figure is quite close to the amount of TikTok’s assets. However, experts say they could manage investor support to acquire the Chinese app.
QUOTE: “Twitter will have difficulty raising sufficient financing to acquire even the U.S. operations of TikTok. It doesn’t have enough debt capacity.”Erik Gordon, professor at the University of Michigan interviewed by Reuters
Microsoft wants to buy TikTok
So far the winner of this bid is Microsoft. The controversy was unleashed by Trump’s position. After that the American multinational was the first to bet on the purchase of the Chinese company. Microsoft’s CEO, Satya Nadella, held a telephone conversation with Trump, who favored the purchase.
After said conversation, the president wanted to make clear that the Treasure Department should get a commission for the transaction if it occurred.
“I stablish a date around September the 15th, moment when it will shut down in United States of America. But if anyone, be it Microsoft or anyone else, buys it, it would be interesting. (…) If we are going to give them the rights, then it has to come in, it has to come to this country”.Donald Trump’s declarations to the C-SPAN network
Meanwhile, Microsoft declares that it will continue the dialogs on buying TikTok. It will also respect the conditions imposed by the government. These actions are based on the notice that was done by the company along with Byte Dance to the Committee of Foreign Investment in the United States.
“Microsoft fully appreciates the importance of addressing the President’s concerns. It is willing to acquire TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury”.Source: Microsoft’s Blog.
How much can TikTok change?
In the official announcement about this topic, Microsoft specifies its intentions with ByteDance’s app. Until today, both parties have shown their interest in exploring the purchase of the service. This will not only be acquired for the United States but also for Canada, Australia and New Zealand.
As a result of the contract, Microsoft will be the owner and the operator of TikTok in these markets. The company that created Windows has specified that it could ask other American investors to participate as a minority in the purchase.
For the users, they have said that the experience will stay the same as they know it. The essential changes will be related to data protection and security. This has been the main object of scandals in TikTok before.
Moreover, Microsoft also foresees that governmental authorities of those 4 countries can perform “an adequate safety oversight”.
Focused on United States, they have specified that they will ensure that all the American user’s data will remain in that country’s servers.
All that information is just a preview of what could come. One thing is clear, the company created by Bill Gates specifically said that it will not divulge more information until the purchase or not is official.
If that transaction takes place, there would be three TikToks in the world: one in China, another one in Europe and the rest of the world and another one managed by Microsoft for 4 countries.
What are they saying in China?
About the possible sale to the US, Zhang Yiming, founder of ByteDance, sent a letter to all his workers. The letter refers to the commitment of the company with its users, to the values that it has accompanied it since its creation and to the possible sale of TikTok as an inevitable fact.
Zhang Yiming’s words
In this text, Yiming relates as a company that has cooperated with CFIUS for years now, even though he clarifies that it always kept its independence. He also tells us how and with which arguments it was determined that ByteDance had to get rid of TikTok operations in the US. About this he says:
“We disagree with CFIUS’s conclusion because we have always been committed to user safety, platform neutrality, and transparency. However, we understand their decision in the current macro environment. To help resolve these issues, we initiated preliminary discussions with a tech company to help clear the way for us to continue offering the TikTok app in the U.S”.Source: Zhang Yiming’s Letter.
In another moment of the letter he said that he didn’t know the final solution for the company yet. Even so, he encouraged his employees to keep working with the same motivation and endeavor.
On the other hand, the journal China Daily published an editorial where it explains that the Asian nation won’t accept the theft of TikTok and that the country will answer in case that the north American government pressures to force the transaction.
“The US administration’s bullying of Chinese tech companies stems from data being the new source of wealth and its zero-sum vision of “American first”. With competitiveness now dependent on the ability to collect and use data, it offers an either-or choice of submission or mortal combat in the tech realm. There are no carrots to promote cooperation only sticks”.Source: China Daily
This controversy brings out the security and protection data on digital platforms. A tricky matter about which we invite you to learn more on our blog.