ByteDance previously sought to retain a minority stake in the US firm of TikTok, which the White House had rejected. As part of the proposed new deal, ByteDance would quit completely and Microsoft would take over TikTok in the United States, the sources said. Some US-based ByteDance investors may have the option of taking minority stakes in the company, the sources added.The White House did not respond to a request for comment on whether or not Trump would accept the ByteDance concession. ByteDance in Beijing did not respond to a request for comment.
Microsoft did not respond to a request for comment.
Trump told reporters aboard Air Force One on Friday night that he would order a ban on TikTok in the United States as of Saturday. “Not the deal you heard about, that they’re going to buy and sell… We’re not a merger and acquisition [mergers and acquisitions] country, ”Trump said.
The White House declined to say whether Trump would accept the ByteDance concession. ByteDance in Beijing did not respond to a request for comment.
According to ByteDance’s new proposal, Microsoft would be in charge of protecting all US user data, the sources said. The plan allows another US company other than Microsoft to take over TikTok in the US, the sources added.
As relations between the United States and China deteriorate due to trade, Hong Kong autonomy, cybersecurity and the spread of the novel coronavirus, TikTok has become a flashpoint in the dispute between the two largest economies in the world.
ByteDance considered a range of options for TikTok amid US pressure to relinquish control over the app, which allows users to create short videos with special effects and has become very popular with American teens.
ByteDance acquired the Shanghai-based Musical.ly video app under a billion dollar contract in 2017 and relaunched it as TikTok the following year. ByteDance has not sought approval for the acquisition from the Committee on Foreign Investments in the United States (CFIUS), which is reviewing the agreements for potential national security risks.
Reuters reported last year that CFIUS opened an investigation into TikTok.
The United States is increasingly scrutinizing application developers about the personal data they process, especially if any of it involves the U.S. military or intelligence services. Ordering the divestment of TikTok wouldn’t be the first time the White House has taken action on such concerns.