Microsoft is reportedly interested in buying TikTok's entire global business. The company has only said it was negotiating to purchase the service in the U.S., Canada, Australia, and New Zealand. ByteDance, the Chinese owner of TikTok, also operates a separate version of the app within China called Douyin which wouldn't be included in the sale. TikTok is reportedly valued at about $50 billion.
What's this really about? — TikTok has been under bipartisan pressure over fears that it may hand over data on American users to Chinese authorities, something the company has always denied. President Trump has threatened to ban the app in the U.S. if it isn't sold to an American company by September 15th. Some are skeptical of Trump's motives, believing the move is being driven by trade tensions with China and in retaliation against teens who've used the app to organize protests against him.
Secretary of State Mike Pompeo announced earlier today the United States is looking to purge Chinese apps from the smartphone app stores in the interest of privacy. The GOP also hasn't been willing to support meaningful privacy legislation domestically, however, suggesting different motives at hand.
Microsoft's announcement that it would acquire TikTok's business in only a few countries raised immediate questions among technology experts. The purpose of the acquisition would be to ensure data on Americans is stored in the U.S., but doing so would add immense technical complexity to building new features and it's unclear how the app would function abroad. Acquiring the global business could make data management much easier.
TikTok has been trying to distance itself from ByteDance for a long time, but the app shares much of the same code with Douyin and many of the company's developers work on both apps in parallel. According to the Financial Times, Microsoft may seek an agreement in which it has one year to separate the apps.
The dangers of banning TikTok — Tech companies have long relied on the idea that one platform can service the entire globe in order to become behemoths. Forcing TikTok to sell and store data in the U.S. has raised alarms because it could jumpstart further efforts among countries to copy China's existing policy of using data protection policies to favor local companies and force localization of data.
Requiring data to be stored locally makes it harder for companies to reject requests to access user data. It could also push other countries to develop their own intranets like China, siloing users within their own countries. American tech companies traditionally act as stewards for online liberty in the countries in which they operate – if they pulled out that advocacy would go away.
Facebook and Snap have meanwhile exploited concerns about TikTok to release their own competing products. Just yesterday, Instagram released Reels, a carbon copy of TikTok that's built directly into the app. The company is reportedly offering money to popular TikTok users in order to entice them to jump ship. Snapchat will soon allow users to insert music into their content.
The drawbacks aside, if Microsoft is successful at acquiring TikTok globally, Facebook could finally have a serious competitor in the social media space on its hands. Banning the app just entrenches that company further without accomplishing much in terms of protecting Americans.