ByteDance launched the Tik Tok app back in 2017, before purchasing musica.ly, a video service that is popular among teenagers in Europe and the U.S.
Trump has said he could ban the app using an executive order telling reporters Friday according to the NBC News report that he has "that authority". The Committee on Foreign Investment in the USA, which investigates overseas acquisition of US businesses, began a review of the purchase in the fall of 2019, according to a person familiar with the investigation. Earlier this month, a group of ByteDance's United States investors, including Sequoia Capital and General Atlantic, were looking into buying a majority stake in TikTok, according to The Information. Secretary of State Mike Pompeo said earlier this month that the USA was considering banning TikTok.
"I think a total spin-off or US tech firm acquisition is the likely scenario here so it can keep operating", he added. According to a 1988 law, Trump has the authority to block foreign business deals pertaining to United States companies if he deems it a national security threat.
With 80 million active users thus far, the move to ban the fast-growing app will surely be a big blow to ByteDance, despite denying claims that it is controlled or shared its data with the Chinese government. Pompeo added that the Trump administration was evaluating TikTok as it has with other Chinese state-backed tech companies like Huawei and ZTE, which he has previously described as 'Trojan horses for Chinese intelligence.' But are national security concerns really behind Trump's sudden pronouncement? The app's Chinese ownership has become the subject of concern for lawmakers, regulators and privacy activists.
With hundreds of millions of active users, TikTok could give Microsoft access to a large group who otherwise might not be exposed to its products on a daily basis.
But the clear trend at Microsoft under CEO Satya Nadella has been to focus on the company's enterprise roots, cutting short its fanciful forays into consumer technology.
TikTok is now used by more than 800 million people worldwide, and TikTok's Chinese offices have, "swollen to thousands of employees". Reuters starts this 5 paragraph story saying that Microsoft "would take over" TikTok business in the United States, but then ends it by saying that no actually Microsoft would be in charge of protecting the data, and another company would take over TikTok.