Trump seeks TikTok payment to USA, despite no clear authority

Joanna Estrada
August 5, 2020

Also on Sunday, US Secretary of State Mike Pompeo said President Trump would take action "in the coming days" against Chinese-owned software companies that he believed posed a national security risk.

People familiar with the company said that Douyin and TikTok's algorithms are handled by engineers in Beijing and Shanghai.

Klein added it "will close down on September 15 unless Microsoft or somebody else is able to buy it and work out a deal, an appropriate deal, so the Treasury. of the United States gets a lot of money".

The U.S. assesses fees associated with deals under review by the Committee on Foreign Investment in the United States, or CFIUS, which investigates overseas acquisitions of U.S. businesses. Trump has also indicated that the U.S. Treasury should receive a "substantial amount of money" from the proposed sale, although there is some confusion as to what he exactly means by those comments.

The Trump administration has accused TikTok and others of providing data to the Chinese government - which Beijing and TikTok deny.

After vowing to ban the popular short-video sharing app TikTok in the United States on Friday, the U.S. president is reportedly weighing the advantages of allowing Microsoft to purchase its USA operations.

Some of the legal experts say the White House could argue for Trump's behavior that imposing a fee on ByteDance would deprive it of resources that would otherwise support China's government on technology initiatives that could harm US interests.

"I doubt that's what Trump has in mind", said Hal Singer, an antitrust expert and managing director at consulting firm Econ One.

China, however, seems less willing to work with the USA government.

China had "limited ability" to provide protection to these Chinese companies by retaliating against USA companies because the United States had technological superiority and influence with its allies, it added.

He told staff to "anticipate more difficulties in the future" and said anti-China sentiment has recently "risen significantly in many countries".

"Of course, we may never get to a formal ban or divestment order", Opsahl added, noting the potential Microsoft sale.

By April, TikTok, combined with its Chinese version Douyin, had been downloaded more than 2 billion times globally, according to market intelligence firm Sensor Tower.

A look at Microsoft's track record on recent acquisitions, including building game Minecraft in 2014 and business networking site LinkedIn in 2016, could validate TikTok users' optimism, analysts said. "Without the lease, the tenant doesn't have the value", he said.

When later asked whether the money should come from Microsoft or TikTok's parent company, the China-owned ByteDance, he said the USA should receive a significant portion of the deal regardless of who paid the fee.

"I did say that if you buy it, whatever the price is that goes to whoever owns it, because I guess it's China essentially".

"The United States should get a very large percentage of that price, because we're making it possible". But typically, he said, Google and Apple provide transparent reasons for removal, namely, that it violates the terms of service or infringes on user privacy. "Outside of that I can't think of any means by which the USA could basically get its vig on its forced transfer".

Legal experts said it remains unclear how the US government can receive part of the purchase price.

On Monday, he clarified that the company could continue to operate in the US if they sold their USA arm to an American-owned company.

Other reports by Click Lancashire

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