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Sunday, 9 August 2020

Twitter 'is in talks to buy TikTok' in bid against Microsoft - as the Chinese app moves to sue Trump over his executive order banning it from the US

Twitter has approached TikTok's Chinese owner ByteDance to express interest in acquiring the U.S. operations of the video-sharing app.
Experts raised doubts over Twitter's ability to put together financing for such a large acquisition, after word of the talks was first reported Saturday by the Wall Street Journal, citing sources familiar with the matter.
It is far from certain that Twitter would be able to outbid Microsoft and complete such a transformative deal in the 45 days that President Donald Trump has given ByteDance to agree to a sale, the sources said on Saturday.
Twitter has a market capitalization of close to $30 billion, almost as much as the valuation of TikTok's assets to be divested, and would need to raise additional capital to fund the deal, according to sources.
Twitter CEO Jack Dorsey is seen in a file photo. Twitter has approached TikTok's Chinese owner ByteDance to express interest in acquiring the U.S. operations of the video-sharing app
Twitter CEO Jack Dorsey is seen in a file photo. Twitter has approached TikTok's Chinese owner ByteDance to express interest in acquiring the U.S. operations of the video-sharing app
It is far from certain that Twitter would be able to outbid Microsoft and complete such a deal in the 45 days that President Donald Trump has given ByteDance to agree to a sale
It is far from certain that Twitter would be able to outbid Microsoft and complete such a deal in the 45 days that President Donald Trump has given ByteDance to agree to a sale
'Twitter will have a hard time putting together enough financing to acquire even the U.S. operations of TikTok. It doesn't have enough borrowing capacity', said Erik Gordon, a professor at the University of Michigan.
'If it (Twitter) tries to put together an investor group, the terms will be tough. Twitter's own shareholders might prefer that management focus on its existing business', he added.
One of Twitter's shareholders, private equity firm Silver Lake, is interested in helping fund a potential deal, one of the sources added.
Twitter has also privately made a case that its bid would face less regulatory scrutiny than Microsoft's, and will not face any pressure from China given that it is not active in that country, the sources said.
TikTok, ByteDance and Twitter declined to comment.
TikTok has come under fire from U.S. lawmakers over national security concerns surrounding data collection.
Earlier this week, Trump unveiled bans on U.S. transactions with the China-based owners of messaging app WeChat and TikTok, escalating tensions between the two countries.
Trump said this week he would support Microsoft's efforts to buy TikTok's U.S. operations if the U.S. government got a 'substantial portion' of the proceeds. He nevertheless said he will ban the popular app on September 15.
Microsoft said on Sunday it was aiming to conclude negotiations for a deal by mid-September.
Meanwhile, TikTok is reportedly planning to sue the Trump administration over the president's executive order banning the Chinese app from the US.  
The video-sharing service is prepared to file a federal lawsuit as early as Tuesday in the US District Court for the Southern District of CaliforniaNPR reported Saturday, citing an unnamed source who was directly involved in the forthcoming litigation.   
The outlet said TikTok will argue the order Donald Trump signed on Thursday is unconstitutional because it did not give the company an opportunity to respond, and that the national security justification given for the ban is baseless.  
'It's based on pure speculation and conjecture,' the source said. 'The order has no findings of fact, just reiterates rhetoric about China that has been kicking around.'
The White House declined to comment on the expected legal battle when approached for comment by NPR. 
However, spokesman Judd Deere did defend Trump's order, saying: 'The Administration is committed to protecting the American people from all cyber related threats to critical infrastructure, public health and safety, and our economic and national security.' 
TikTok is reportedly planning to sue the Trump administration over the president's executive order banning the Chinese app from the US (file photo)
TikTok is reportedly planning to sue the Trump administration over the president's executive order banning the Chinese app from the US (file photo) 
Trump on Thursday night issued his executive order banning TikTok in the US and giving its parent company ByteDance 45 days to sell the app.  
The order claims that TikTok 'may also be used for disinformation campaigns that benefit the Chinese Communist Party,' and specifically cites TikTok videos that 'spread debunked conspiracy theories about the origins of the 2019 Novel Coronavirus'. 
It also states that the company 'reportedly censors content that the Chinese Communist Party deems politically sensitive, such as content concerning protests in Hong Kong and China's treatment of Uyghurs and other Muslim minorities'.
'The United States must take aggressive action against the owners of TikTok to protect our national security,' it adds. 

Along with the executive order, Trump sent a letter to the House speaker and Senate president explaining the move.
The letter states that TikTok 'automatically captures vast swaths of information from its users'.
'This data collection threatens to allow the Chinese Communist Party access to Americans' personal and proprietary information - potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage,' it continued. 
TikTok is expected to argue that President Donald Trump's executive order banning the app in the US is unconstitutional because the company was not given an opportunity to respond
TikTok is expected to argue that President Donald Trump's executive order banning the app in the US is unconstitutional because the company was not given an opportunity to respond
Beijing slammed Trump's order as 'arbitrary political manipulation and suppression' and said it would come at the expense of American users and companies. Chinese President Xi Jinping is pictured on July 31
Beijing slammed Trump's order as 'arbitrary political manipulation and suppression' and said it would come at the expense of American users and companies. Chinese President Xi Jinping is pictured on July 31
Trump says he encouraged Microsoft to buy all of TikTok
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In a statement TikTok vowed to 'pursue all remedies available to us in order to ensure... our company and our users are treated fairly - if not by the Administration, then by the US courts'. 
Amid growing security and privacy concerns about the TikTok's Chinese ownership, Microsoft has reportedly been in talks to acquire TikTok in a firesale, and Trump's order only increases pressure on ByteDance to get the deal done quickly.
Any company still doing business with ByteDance in 45 days will be subject to sanctions, Trump said. If a sale does not go through before the September 20 deadline, the order would effectively bar the use of TikTok throughout the US.

In a separate executive order, Trump issued a similar ban on the Chinese-owned messaging service WeChat, accusing the app of funneling personal information to the Chinese Communist Party. 
Coming days after the US ordered China to vacate its consulate in Houston, the executive orders threatened to trigger retaliatory action by Beijing, stoking fears that a 'Silicon Curtain' is descending between the two superpowers. 
Beijing slammed the orders as 'arbitrary political manipulation and suppression' and said it would come at the expense of American users and companies. 
ByteDance has denied that it shares data with the Chinese government, and Chinese state media blasted the US response to TikTok as 'madness'.
Under a Chinese law introduced in 2017, companies there have an obligation to support and cooperate with the country's national intelligence work.  
On Thursday, the US Senate unanimously voted to approve a bill banning federal employees from using TikTok on government-issued devices.
'I'm encouraged by the bipartisan support we have seen in this body to hold the Chinese Communist Party accountable and that includes... holding accountable those corporations who would just do China's bidding,' Senator Josh Hawley, who sponsored the bill, said in a statement.
'And, if I have anything to say about it, we won't be stopping here,' the Republican senator added.
Last month, the House of Representatives voted to bar federal employees from downloading the app on government-issued devices as part of a proposal offered by Representative Ken Buck.
A finalized version of the bill, combining the House and Senate versions, would need Trump's approval to become law.
Meanwhile, Microsoft has expanded its talks on TikTok to a potential deal that would include buying the global operations of the fast-growing video-sharing app, the Financial Times reported Thursday.
Microsoft declined to comment on the report, after previously disclosing it was considering a deal for TikTok operations in the US, Canada, Australia and New Zealand.
According to the report, Microsoft has shifted its view because of the complexities of splitting the app and making it operable globally. TikTok operates in 150 countries. 
Chinese state media accused Secretary of State Mike Pompeo of 'madness' for cracking down on Chinese software and technology in the US
Chinese state media accused Secretary of State Mike Pompeo of 'madness' for cracking down on Chinese software and technology in the US

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