Trump gives Microsoft 45 days for Tiktok deal

THE COMMITTEE ON FOREIGN INVESTMENT IN THE US CONVEYED THE DEADLINE TO THE FIRMS

NEWYORK/WASHINGTON: President Donald Trump only agreed to allow Microsoft Corp. to negotiate the acquisition of popular short-video app Tiktok if it could secure a deal in 45 days, three people familiar with the matter said on Sunday.

The move represents an aboutface for Trump and prompted the US tech giant to declare its interest in the blockbuster social media deal that could further inflame Us-china relations. Trump said on Friday he was planning to ban Tiktok amid concerns that its Chinese ownership represents a national security risk because of the personal data it handles.

The proposed acquisition of Tiktok, which boasts 100 millions US users, would offer Microsoft a rare opportunity to become a major competitor to social media giants such as Facebook Inc and Snap Inc. Microsoft also owns professional social media network Linkedin.

Trump had dismissed the idea of a sale to Microsoft on Friday. But following a discussion between Trump and Microsoft CEO Satya Nadella, the Redwood, Washington-based company said in a statement on Sunday that it would continue negotiations to acquire Tiktok from Bytedance, and that it aimed to reach a deal by September 15.

This is a deadline that was put to Bytedance and Microsoft by the Committee on Foreign Investment in the United States (CFIUS), which scrutinises deals for potential national security risks, according to the sources.

Trump changed his mind following pressure from some of his advisers and many in his Republican party, one of the sources said. Banning Tiktok would alienate many of its young users ahead of the US presidential election in November, and would likely trigger a wave of legal challenges. Several prominent Republican lawmakers put out statements in the last two days urging Trump to back a sale of Tiktok to Microsoft.

“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 US, including the US Treasury,” Microsoft said in a statement. Bytedance and the White House did not immediately respond to requests for comment.

Under the proposed deal, Microsoft said it would take over Tiktok’s operations in the US, Canada, Australia and New Zealand. It said it would ensure that all private data of Tiktok’s American users is transferred to and remains in the US. Microsoft may invite other American investors to acquire minority stakes in Tiktok, the company added.