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Microsoft has confirmed that acquisition talks with ByteDance over its TikTok app in the U.S., Canada, Australia, and New Zealand. The deal is scheduled to be concluded by September 15.
News about the acquisition of social media sensation TikTok by software giant Microsoft Inc (NASDAQ: MSFT) broke out last week amidst intense pressure from Washington. The parties involved have confirmed the acquisition talks and hopes to finalize the deal by September 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 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,” Microsoft said in a statement
Grounds on Which Microsoft Plans to Acquire TikTok
As Сoinspeaker reported, the acquisition talks are inspired by plans by President Donald Trump administration to ban the TikTok app on the premise that it is capable of being used to gather data on Americans for use by Beijing. The potential taking over of ByteDance U.S. operations potentially valued at $5 billion will help relieve the Chinese firm of the pressures from the White House.
Owned by ByteDance, a Beijing-based internet technology company, the TikTok app can be used to create short dance, lip-sync, comedy, and talent videos, a fascinating offering that has endeared it to many users in the United States and around the world. While the application as is the case with many applications out there collects user’s biometrics amongst other sensitive information, TikTok CEO Kevin Meyer has refuted claims of gathering such data for China’s use.
He noted that despite the app’s Chinese origins, they have been compliant with regulations and transparent in their data handling practices. He said in a statement:
“The entire industry has received scrutiny, and rightly so. Yet, we have received even more scrutiny due to the company’s Chinese origins. We accept this and embrace the challenge of giving peace of mind through greater transparency and accountability…We will not wait for regulation to come, but instead TikTok has taken the first step by launching a Transparency and Accountability Center for moderation and data practices.”
What to Look Out For in the Proposed Deal
As Microsoft revealed, the TikTok acquisition involves the app’s operations in the United States, Canada, Australia, and New Zealand. MSFT hopes to give American investors an opportunity to take part in minority ownership of the company in this purchase. The software giant will operate the company under a new structure.
“This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections. The operating model for the service would be built to ensure transparency to users as well as appropriate security oversight by governments in these countries.” the company confirmed
Microsoft is making a commitment to protect American’s private data and that it would delete any such data stored in any server outside of America.
In an analysis made by CNBC, the acquisition deal appears unfavorable to Microsoft who focused more on enterprise software under CEO Satya Nadella. The stage of growth of TikTok which is now beginning to monetize adverts backed by its over 100 million users will eventually turn out to benefit Microsoft.