President Trump has plans to order China’s ByteDance, the owner of hit social video app TikTok, to divest from the company, according to new reporting from Bloomberg. The app is increasingly a target of U.S. security concerns over its Chinese ownership.
After the initial news, reports bubbled up that Microsoft is in talks to buy the Chinese social network, which has a massive footprint in the U.S. and beyond. TikTok itself is not available in China and Chinese users instead use Douyin, a similar ByteDance-owned app specific to the country.
While little is known about what such a sale could mean or if the president would really play any role, the event would send huge waves through the tech world. TikTok is one of the only meaningful outside competitors for U.S.-based social networks like YouTube and Facebook.
It’s also not clear if the sale would somehow spin out the company’s U.S. business or if TikTok’s broad international operations would remain intact.
TikTok knows it’s in trouble in the U.S. At a time when even American tech companies are under fire from regulators, the company desperately needs to alleviate government concerns about its Chinese ownership. TikTok made a big strategic move in that direction this May, hiring Disney executive Kevin Mayer on as CEO of TikTok and COO of ByteDance.
It would certainly be strange timing were an American tech giant to purchase TikTok: On Wednesday, a Congressional committee held a high-profile hearing scrutinizing tech’s biggest mergers and acquisitions. The White House declined to comment on the report when contacted by TechCrunch.
Although its big tech peers Apple, Google, Facebook and Amazon were subject to four-plus hours of Congressional scrutiny Wednesday, Microsoft was not asked to attend. Unlike those companies, Microsoft has grappled with antitrust action by the U.S. government before. Microsoft’s primary focus on enterprise rather than consumer business likely also steered regulators away, though the TikTok deal could invite new attention unless it has some kind of special blessing from the federal government.
TikTok has come under increased government scrutiny recently, with the president expressing interest in banning the app outright in the U.S. This month, Joe Biden’s campaign asked its staffers to delete the app from both work and personal devices.
Some U.S. companies have also banned their employees from using the app over concerns about its Chinese ownership.