As TikTok
became more popular, U.S. officials grew concerned about the potential for the
Chinese government to use the app to gain data on U.S. citizens.
Microsoft
Corp. is exploring an acquisition of TikTok in the U.S., as President Donald
Trump threatens to ban its operation.
Bloomberg
reported that the deal would give the software company, a popular social-media
service a soft landing and relieve U.S. government pressure on the Chinese
owner of the video-sharing app.
The Trump
administration has been weighing whether to direct China-based ByteDance Ltd.
to divest its stake in TikTok’s U.S. operations, according to several people
familiar with the issue.
The U.S. has
been investigating potential national security risks due to the Chinese
company’s control of the app.
Spokespeople
for Microsoft and TikTok declined to comment on any potential talks. The
software company’s interest in the app was reported earlier by Fox Business
Network.
“We are
looking at TikTok. We may be banning TikTok,” Trump told reporters Friday at
the White House.
“We are
looking at a lot of alternatives with respect to TikTok.”
Any
transaction could face regulatory hurdles. ByteDance bought Musical.ly Inc. in
2017 and merged it with TikTok, creating a social-media hit in the U.S — the
first Chinese app to make such inroads.
The Committee
on Foreign Investment in the U.S. began a review in 2019 of the Musical.ly
purchase.
In recent
years, CFIUS, which investigates overseas acquisitions of U.S. businesses, has
taken a much more aggressive role in reviewing and approving deals that may
threaten national security.
It can
recommend that the president block or unwind transactions.
It’s also
possible that other potential buyers could come forward, said another person
familiar with the discussions.
Microsoft’s
industry peers — Facebook Inc., Apple Inc., Amazon.com Inc. and Alphabet Inc. —
fit the profile of potential suitors, though all are under antitrust scrutiny
from U.S. regulators, which would likely complicate a deal.
A purchase of
TikTok would represent a huge coup for Microsoft, which would gain a popular
consumer app that has won over young people with a steady diet of dance videos,
lip-syncing clips and viral memes.
The company
has dabbled in social-media investments in the past, but hasn’t developed a
popular service of its own in the lucrative sector.
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