Trump OKs Microsoft bid for TikTok

WASHINGTON -- President Donald Trump gave the go-ahead for Microsoft to pursue an acquisition of TikTok, in his first public comments about the popular Chinese-owned video app after he had threatened to ban it from the United States entirely.

Speaking at the White House on Monday, Trump said TikTok would shut down on Sept. 15 unless Microsoft or another company purchased it, and that he had suggested in a call this weekend that the chief executive of Microsoft "go ahead" with the acquisition.

"It can't be controlled for security reasons by China," Trump said of TikTok, adding that he did not mind if Microsoft or another very secure, "very American" company bought it instead.

Trump said such a purchase would funnel a large amount of money to China, and argued that the United States should receive money in return for letting the deal happen.

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"A very substantial portion of that price is going to have to come into the Treasury of the United States, because we're making it possible for this deal to happen," Trump said.

It was unclear how the president would require TikTok to pay a portion of its sale to the U.S., beyond the normal collection of tax revenue by the Internal Revenue Service. A Treasury Department spokesperson did not immediately respond to a request for comment. A White House spokesman also did not immediately return a request for an explanation.

Trump's comments indicated at least a temporary reprieve for TikTok, which has come under scrutiny in Washington for its Chinese ownership. Trump administration officials and lawmakers of both parties have argued that the app, which is known for dance videos and other fun viral clips, could pose a national security threat by potentially giving the Chinese government access to American users' data or allowing it to use the app to influence the 165 million Americans, and more than 2 billion users globally, who have downloaded it.

"Microsoft fully appreciates the importance of addressing the President's concerns," the company said in a statement. "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."

Executives at TikTok have insisted that it does not take direction from ByteDance, the Chinese multinational that developed the social networking service.

MICROSOFT, CHINA TIES

Microsoft entered China in 1992, helping to engineer the government's computer systems and installing special versions of Windows operating systems that would comply with the country's censorship controls. Early on, the company launched a huge research operation in China, churning out a feeder system of tech executives who would go on to start or work at many of China's biggest tech companies.

The large presence endeared the Redmond, Wash.-based company to Chinese officials, who allowed Microsoft to maintain the only major Western-run search engine and social media companies in Bing and LinkedIn, albeit censored versions.

The company also operates cloud services under a joint venture with a Chinese company, and its Xbox console was the first of that type of video-game device approved for sale in China, again through a joint venture. In September, Microsoft President Brad Smith criticized Trump and his administration for what he called unfair treatment of Chinese telecom giant Huawei Technologies Co., angering some Republican senators.

A government panel that examines national security threats, called the Committee on Foreign Investment in the United States, has extended its deadline by 45 days to allow Microsoft to explore the purchase, a person familiar with the matter said. The 45-day extension was first reported by Reuters.

Following months of deliberations, that panel had recommended that TikTok sell its assets to a U.S. company to curtail China's potential influence in the United States, and Microsoft had stepped forward as a potential buyer.

But several China hawks in the Trump administration, including White House trade adviser Peter Navarro, argued against the sale, seeing the moment as an opportunity to take more sweeping action to ban TikTok and other Chinese-run internet services like Tencent's WeChat.

THREATENED BAN CALLED OFF

Trump appeared to take Navarro's side Friday, saying he did not favor a sale of TikTok and that he instead planned to ban the app through an executive action Saturday, but after a series of calls, including from Sen. Lindsey Graham, R-S.C., and Satya Nadella, chief executive of Microsoft, Trump appeared to change his mind.

Several of Trump's aides had warned that a ban could prompt an intense legal battle, as well as hurt the president's popularity with younger Americans. TikTok has said it is used by 100 million Americans.

TikTok acquired something of an anti-Trump reputation in June, after some of its users boasted that they had registered for thousands of tickets to Trump's campaign rally in Tulsa to embarrass the campaign, but pro-Trump content on the app is widespread. Some of its most popular users are conservatives, and the hashtag #conservative has 1.9 billion views.

In a blog post Sunday, Microsoft said it would "move quickly to pursue discussions with ByteDance "in a matter of weeks," and it would conclude the talks no later than Sept. 15.

The company also said any deal would include transferring any and all user information to servers in the United States. Microsoft may also bring in outside minority investors if a deal moves forward.

Information for this article was contributed by Ana Swanson and Mike Isaac of The New York Times; by Jeff Stein of The Washington Post; and by Justin Sink, Shelly Banjo and Dina Bass of Bloomberg News.

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