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Innovation

Microsoft out of race to purchase TikTok as US ban draws near

Oracle reported as being the controversial app's new 'trusted tech partner'.
Written by Asha Barbaschow, Contributor on

The owner of controversial video-sharing app TikTok has a September 15 deadline to either sell to a US company or see the service banned from the US market, following President Donald Trump's executive order that labelled the platform as a "national emergency".

Microsoft threw its hat in the ring prior to the official announcement from the president, saying it wanted to scoop up TikTok and add "world-class security, privacy, and digital safety protections" to the app if it did.

It soon reportedly joined forces with Walmart to co-bid for the Chinese company's US, Canadian, Australian, and New Zealand operations.

Microsoft officials had characterised the discussions as "preliminary", noting it was not intending to provide any further updates on the discussions until there was a definitive outcome.

But in approaching the deadline, ByteDance said it would not include TikTok's algorithm as part of the sale, according to a South China Morning Post report. The Chinese company has also told Microsoft it would not be its new owner.

"ByteDance let us know today they would not be selling TikTok's US operations to Microsoft," the company said in a blog post.

"We are confident our proposal would have been good for TikTok's users, while protecting national security interests."

Sunday's blog post reiterated what Microsoft has stated from the start -- that the potential acquisition would have required "significant changes" to the app's current state.

"To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement," it said.

"We look forward to seeing how the service evolves in these important areas."

Following Microsoft's bid, Oracle also began holding talks with ByteDance, showing its interest in the video-sharing app.

The Wall Street Journal on Monday morning reported Oracle would shortly be announced as TikTok's "trusted tech partner" and that the video-sharing platform's sale would not exactly be structured as an acquisition.

As of the start of August, TikTok has clocked over 175 million downloads in the US, and around 800 million globally.

"TikTok automatically captures vast swaths of information from its users, including internet and other network activity information such as location data and browsing and search histories," the executive order made by Trump said.

"This data collection threatens to allow the Chinese Communist Party access to Americans' personal and proprietary information -- potentially allowing China to track the locations of federal employees and contractors, build dossiers of personal information for blackmail, and conduct espionage."

TikTok struck back, confirming it would launch a lawsuit against the US government with regards to its ban. Any potential lawsuit, however, would not prevent the company from being compelled to sell off the app in the US market. 

TikTok also reiterated its previous stance that it has worked to engage the Trump administration for almost a year to "provide a construction solution" to resolve concerns the latter had about the app. 

"We strongly disagree with the Administration's position that TikTok is a national security threat," it said.

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