Abu Dhabi, UAESaturday 31 October 2020

Donald Trump 'will ban TikTok' as Microsoft opens talks over buyout

US officials voiced concerns about the platform being used for nefarious purposes, but the company denies any link to Beijing

Tik Tok is under scrutiny from the US government. AFP
Tik Tok is under scrutiny from the US government. AFP

US President Donald Trump said on Friday that he would ban fast-growing social media app TikTok from the US after authorities raised concerns the service could be a tool for Chinese intelligence.

In recent weeks, US officials and politicians voiced concerns about the wildly popular video platform being used by Beijing for nefarious purposes, but the company denies any link to the Chinese government.

Media reports circulated earlier on Friday said Mr Trump would require the US operations of the app to be divested from its Chinese parent company, ByteDance, but he announced a ban.

"As far as TikTok is concerned, we're banning them from the United States," Mr Trump said.

He said he would take action as soon as Saturday using emergency economic power or an executive order.

Mr Trump's move comes after a review by the Committee on Foreign Investment in the US, which investigates deals affecting US national security.

TikTok, which is especially popular with young audiences who create and watch its short-form videos, has an estimated one billion users worldwide.

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A message to the TikTok community.

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TikTok declined to comment on the reports of the forced sales, saying only: "We are confident in the long-term success of TikTok.

"Hundreds of millions of people come to TikTok for entertainment and connection, including our community of creators and artists who are building livelihoods from the platform."

This week, the company pledged a high level of transparency, including allowing reviews of its algorithms, to assure users and regulators.

"We are not political, we do not accept political advertising and have no agenda – our only objective is to remain a vibrant, dynamic platform for everyone to enjoy," TikTok chief executive Kevin Mayer said this week.

"TikTok has become the latest target, but we are not the enemy."

The continuing row comes as Microsoft could re-energise its advertising business with a huge supply of video as it seeks to acquire TikTok's US operations from ByteDance.

Reuters reported on Friday that Microsoft is in exploratory deal talks as the US government prepares to force China-based ByteDance to divest its video app TikTok over data security concerns.

Microsoft generates the bulk of its $143 billion (Dh525.17bn) in annual revenue by licensing software such as Windows and Office, as well as cloud storage and computing tools through its Azure service.

The company, with advertising supported businesses including its Bing search engine, MSN news service and LinkedIn business social network, disclosed this month that its search advertisement sales grew 1 per cent to $7.7bin over the past year. But that growth was flat when excluding fees it pays to partner websites and apps.

Market research company eMarketer has estimated LinkedIn's advertisement revenue at about $2bn annually in the US alone. But this month Microsoft also said LinkedIn advertisement sales have fallen this year as the coronavirus pandemic prompted advertisers to pare spending.

Social media services, including Facebook and YouTube, have seen their sales growth continue during the pandemic as users spend more time entertaining themselves online, particularly with videos, and advertisers follow them there.

Without an entertainment service aimed at a broad audience, Microsoft has struggled to capture the increasingly lucrative videos flowing to YouTube, Facebook and more recently TikTok, which widely opened its advertising tools this month.

Updated: August 2, 2020 02:53 PM

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