TikTok rejects Microsoft offer with one day left to sell US operations

  • TikTok has rejected Microsoft’s offer to buy the mini-video app’s US operations, the tech giant has said.

    Chinese firm Bytedance, which owns TikTok, was given a deadline of 15 September by President Donald Trump to sell its American outfit to a US company or shut down in the States altogether.

    This comes after White House claims that the social media platform is a national security threat along with other Chinese owned apps.

    Database tech firm Oracle has led the bidding race to buy TikTok along with Microsoft, and the Wall Street Journal and Reuters have reported that it has now won the war.

    RELATED: TikTok to open new £375m data centre in Ireland

    TikTok has grown rapidly outside of China and is now estimated to be worth somewhere in the region of $15-30bn, with over 50m daily active users in the US alone.

    Its US-based business also operates into Canada, Australia, and New Zealand, and revenue from advertising on the US service could be worth $500m per year. 

    Previous reports cited that Oracle was seriously considering buying these operations with investment firms, including General Atlantic and Sequoia Capital.

    A TikTok spokesperson told the BBC the firm was "not commenting on either the Microsoft development nor the Oracle speculation".

    On Sunday 13 September Microsoft said in a statement that “ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft. We are confident our proposal would have been good for TikTok’s users, while protecting national security interests” and added: “We look forward to seeing how the service evolves in these important areas”.

    RELATED: TikTok CEO resigns amid US security pressures to sell app

    China announced new government restrictions on tech exports a fortnight ago, which tech experts believe are aimed at postponing the TikTok sale.

    The new rules mean some technologies such as artificial intelligence (AI) will need government approval before they can be exported.

    TikTok has 800m active users worldwide (Datareportal, 2020).

    Telecoms tech giant Huawei is another Chinese organisation which faces a ban on 15 September affecting its non-American suppliers.

    These suppliers must stop shipping to Huawei if their products contain US technology unless they get a licence from the US Commerce Department.

    RELATED: UK government to strip Huawei from 5G networks by 2027

    The Trump administration believes Chinese-ran businesses such as TikTok and Huawei pose a national security threat because data collected about users can be shared with the Chinese government – claims which the Chinese have always denied.

    TikTok is no stranger to controversies though, and is among large social media platforms that are struggling to police their apps for harmful content amid growing regulatory pressures.

    Last week a video circulated the site of a man apparently taking his own life and TikTok said it was working on banning users who keep trying to spread the clips.

    The news is of particular disturbance as TikTok’s audience is mainly very young, with an estimated 13% of 12-15 year olds actively using the app, according an Ofcom survey held last year. 

    Statistics site Statista reported that in December 2019, over a quarter of UK smartphone users aged between 18 and 24 were also using TikTok.

    RELATED: TikTok blocks under-16s from private messaging

    Sources: BBC News, LA Times

    About the author

    Niamh is a Sync NI writer with a previous background of working in FinTech and financial crime. She has a special interest in sports and emerging technologies. To connect with Niamh, feel free to send her an email or connect on Twitter.

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