allegedly does not limit the takeover talks with TikTok only to the business in the USA, Canada, Australia and New Zealand. As the Financial Times reported, citing several people familiar with the negotiations, the software company should now aim to purchase the entire video app business, including India and Europe.
Company officials are said to have tried to allay concerns of the Chinese government to prevent the acquisition from being drawn into the dispute between Beijing and Washington. One source rejected the idea that Microsoft could offer China its own assets in exchange for TikTok.
The first rumors about Microsoft’s entry into TikTok had surfaced at the end of last week. Also at the end of last week, US President Donald Trump launched a ban on TikTok for data breaches. Microsoft then confirmed the talks with TikTok operator ByteDance on Sunday and announced that it would close the negotiations by September 15.
Security concerns about TikTok have been around for a long time. The US Navy banned the use of the app on business smartphones in December 2019. In June it was finally announced that TikTok, like many other apps, reads data from the iOS clipboard, and does so continuously.
TikTok, however, endeavors to make it clear that it is not subject to Chinese jurisdiction. The app is not offered in China, and ByteDance does not operate data centers for TikTok in China. According to the company, these are located exclusively in the USA and Singapore.
ByteDance also announced that it will build its own data center for the European region. It is to be built in Ireland and cost around 420 million euros. The aim is to shorten the loading times for users in Europe and to better protect their data, as reported by Bloomberg.
US President Trump yesterday increased political pressure on Microsoft and ByteDance. He signed two edicts, which are due to come into force in 45 days and prohibit US citizens from making any transactions with ByteDance and its subsidiaries. The same applies to Tencent and its chat app WeChat.
“At this point, measures need to be taken to address the threat from a mobile application, particularly TikTok,” said Trump. “TikTok automatically collects huge amounts of data from its users, including information about Internet and other network activities such as location data and browsing and search histories,” the decree said. This gives the Chinese Communist Party access to personal and proprietary data of US citizens, which may allow China to track the whereabouts of federal officials and to create personal files for extortion or espionage. TikTok and WeChat thus posed a threat to US security.
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