Trump gives Microsoft 45 days to land TikTok deal after threatening to ban Chinese-owned video app
Microsoft CEO spoke to Trump, 'prepared to continue discussions to explore a purchase of TikTok'
U.S. President Donald Trump said on Monday he does not mind if Microsoft Corp. buys the Chinese-owned short-video app TikTok, but any purchase by an American company would have to be done by a Sept. 15 deadline.
The Republican president, who last week threatened to ban TikTok over national security concerns, said he had a great conversation with Microsoft's chief executive and that it might be easier if the company buys all of TikTok rather than 30 per cent.
Trump's comments confirmed a Reuters report Sunday that he had agreed to give China's ByteDance 45 days to negotiate a sale of TikTok to Microsoft.
Trump also said the U.S. Treasury would need to get a lot of money out of a TikTok deal, but it's not clear how that would happen.
Microsoft said Sunday that CEO Satya Nadella had spoken to Trump and "is prepared to continue discussions to explore a purchase of TikTok in the United States."
WATCH | Trump claims TikTok is a threat to national security:
Reuters reported last week that some investors are valuing TikTok at about $50 billion US, citing people familiar with the matter.
"I did say that if you buy it, whatever the price is that goes to whoever owns it, because I guess it's China essentially — I said a very substantial portion of that price is going to have to come into the Treasury of the United States because we're making it possible for this deal to happen," Trump said.
Trump later defended his push for a cut, adding "which nobody else would be thinking about but me, but that's the way I think."
Nicholas Klein, a lawyer at DLA Piper, said generally "the government doesn't have the authority to take a cut of a private deal through" the Committee on Foreign Investment in the United States (CFIUS), which is the interagency committee that reviews some foreign investments in the United States. It was not clear how the U.S. government would receive part of the purchase price.
'This is about privacy'
Many prominent Republicans, including House Republican Leader Kevin McCarthy, issued statements in support of a Microsoft acquisition of TikTok's U.S. operations. Some congressional aides are worried about a backlash by younger voters against the party if Trump banned TikTok, which has 100 million American users.
Microsoft and TikTok parent ByteDance gave the U.S. government a notice of intent to explore a preliminary proposal for Microsoft to purchase the TikTok service in the United States, Canada, Australia and New Zealand.
U.S. Senate Democratic Leader Chuck Schumer also backed the sale, while a senior White House adviser raised concerns about a sale to Microsoft.
"A U.S. company should buy TikTok so everyone can keep using it and your data is safe," Schumer said on Twitter, adding: "This is about privacy. With TikTok in China, it's subject to Chinese Communist Party laws that may require handing over data to their government."
White House trade adviser Peter Navarro suggested on Monday that Microsoft could divest its holdings in China if it were to buy TikTok.
"So the question is, is Microsoft going to be compromised?" Navarro said in an interview with CNN. "Maybe Microsoft could divest its Chinese holdings?"
Navarro said the Chinese government and military use Microsoft software "to do all the things they do."
Other acquisitions possible: analyst
U.S. officials have said TikTok poses a national security risk because of the personal data it handles.
TikTok CEO Kevin Mayer said in a blog post last week that the company was committed to following U.S. laws and was allowing experts to observe its moderation policies and examine the code that drives its algorithms.
Daniel Elman, analyst at Nucleus Research, said a sale "could foreshadow a growing wave of U.S. company acquisition of Chinese internet properties, particularly if the geopolitical tensions continue to mount."
Elman said that could impact Tencent's WeChat.
Secretary of State Mike Pompeo referenced WeChat on Sunday and said Trump "will take action in the coming days with respect to a broad array of national security risks that are presented by software connected to the Chinese Communist Party."