President Donald Trump told after a Cabinet meeting Monday that he’ll ban video sharing app TikTok in the U.S. on September 15 if Microsoft, or another party, doesn’t close a purchase of the platform by then.
The President and Microsoft CEO Satya Nardella discussed the possible deal over the weekend.
“We had a great conversation. He called me to see whether of not, how I felt about it, and I said look, it cannot be controlled, for security reasons, by China, too big, too invasive, and here’s the deal,” President Trump said. “I don’t mind if, whether it is Microsoft or somebody else, a big company, a secure company, very American company buy it.”
But “It will close down on Sept. 15 unless Microsoft or somebody else is able to buy it and work out an appropriate deal so that the Treasury of the United States gets a lot of money,” he said.
He urged the giant company to buy all of U.S. TikTok in a clean deal.
“My personal opinion is you are better off buying the whole thing than 30% of it. I think 30% is complicated, and I suggested that he could go ahead. He could try. I suggested a date around Sept. 15, at which point it is going to be out of business in the United States,” Trump added.
As Deadline reported Sunday, Microsoft is in talks to buy the popular service that’s owned by Chinese conglomerate ByteDance and that President Trump has threatened to ban due to security concerns.
The Redmond, Washington-based company announced its intentions following the conversation between Nadella and the President. It said it would move quickly for a definitive outcome one way or the other by Sept. 15.
“Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury,” Microsoft said in a post on its corporate blog.
“Microsoft will move quickly to pursue discussions with TikTok’s parent company, ByteDance, in a matter of weeks, and in any event completing these discussions no later than September 15, 2020. During this process, Microsoft looks forward to continuing dialogue with the United States Government, including with the President,” the company said.
A number of financial firms are also said to be interested in acquiring TikTok, possibly in combination with Microsoft. The acquisition would be for TikTok assets in the U.S., Canada, Australia and New Zealand.
TikTok is global, although its Chinese version is called Douyin. It wasn’t immediately clear how TikTok in those four specified regions could be separated from the rest of TikTok, and what the implications would be for the service.
Analyst Rich Greenfield of Lightshed Partners noted that just over a year ago, TikTok’s U.S. GM, Vanessa Pappas, expanded her role to North America and Australia/New Zealand.
“If it can be fully separated, would the new entity owned by Microsoft be forced to stay within just those four countries? If constrained to just four markets, that would appear to be a meaningful disadvantage vs. the global platforms TikTok competes against. Even more importantly, can the algorithms/AI infrastructure that is so powerful within TikTok, eliminating the need for a friends and/or interest graph, be replicated within Microsoft? If not, it is unclear what Microsoft is even buying,” Greenfield said.
The acquisition would also be likely to result in heightened antirust scrutiny of Microsoft.