Update: US president Donald Trump has insisted that the US Treasury should get a hefty portion of TikTok’s US unit should Microsoft seal the deal.
As reported by the BBC, Trump demanded a slice of the sales should the American tech firm succeed in securing a deal in the next 45 days.
“The United States should get a very large percentage of that price because we’re making it possible. It would come from the sale, which nobody else would be thinking about but me, but that’s the way I think, and I think it’s very fair,” said Trump.
The president’s behaviour has not been well received, with one lawyer pointing out that “the government doesn’t have the authority to take a cut of a private deal through.” Furthermore, China has not taken too kindly to a move that they consider to be paramount to theft.
“I hate to say this, but it is kind of almost Mafia-like behaviour – threatening a ban which pushes down the price then saying ‘oh we should get a cut of that deal afterwards to say thank you for what we’ve done there’,” said MIT Technology Review reporter Charlotte Jee to the BBC.
“It is extraordinary behaviour as well because last week we had lawmakers in the US trying to look at whether tech companies are too big and now we’ve got Trump trying to make one of them even bigger so it is a really, really bizarre situation to be in.”
As reported by Reuters, Trump has given the company 45 days to secure a deal for the Chinese app, despite his initial dismissal of the idea. However, Microsoft will continue to involve the president throughout the process.
It is no secret that relations between the US and China are strained, an issue that has seen the ByteDance owned app come under scrutiny with multiple high-profile people – including president Trump himself, who has stated the possibility of banning TikTok in the country.
Trump himself believes the social media app is being used to send data back to China, a danger to national security and US citizens. However, despite the president’s distaste for the short-clip app, his advisors pointed out that many young people use TikTok, and should he ban it, his younger supporters could feel alienated.
In July, the US started an investigation into TikTok after it was alleged that it had breached the privacy of children. At that time, the US secretary of state Mike Pompeo suggested that the country could well ban the app.
However, Pompeo has insisted it is aware that the president’s concerns need to be addressed and that a full security check will be used before any acquisition will take place. Furthermore, the company has promised that all discussions will be completed no later than September 15th, 2020.
“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,” said Microsoft in a blog update.
“Microsoft appreciates the US Government’s and President Trump’s personal involvement as it continues to develop strong security protections for the country.”
Moreover, the company has made it clear that just because discussions are taking place, there is no guarantee a deal will go through. Last month, TikTok announced that it would be leaving the Hong Kong market due to the change in Chinese national security laws.