ByteDance CEO ‘working overtime’ to devise TikTok solution

HONG KONG • ByteDance Ltd is exploring all possibilities to resolve an intensifying confrontation with Washington, CEO Zhang Yiming (picture) said, stressing the world’s largest start-up has made no final decision on options like a sale of TikTok US to Microsoft Corp.

Beijing-based ByteDance has come under pressure from the White House and US lawmakers to sell off its US TikTok operations and now has a 45-day deadline on negotiations with Microsoft over such a deal.

The company had tried to appease regulators who worry about its data collection and potential connection to the Chinese government by distancing its domestic operations from the popular video app, hiring nearly a thousand staff in the US and appointing Walt Disney Co veteran Kevin Mayer as TikTok CEO. However, Zhang said efforts so far to assuage Washington’s concerns may have fallen short.

“The current geopolitical and public opinion environment is becoming more and more complex. We are facing great external pressure in some markets,” the founder told employees in an internal memo. “Our team in response has been working around the clock and overtime in the past few weeks to strive for the best outcome.”

As TikTok surged to global popularity, American officials began calling for a national security investigation into the app. The Committee on Foreign Investment in the US (CFIUS), which investigates overseas acquisitions of US businesses, last year opened a review of the Musical.ly purchase that led to TikTok’s creation.

“Even though we’ve repeatedly stressed that we’re a privately-run business and despite our willingness to adopt even more technical solutions to allay their concerns, CFIUS still believes ByteDance has to sell the TikTok US operation. We do not agree with this decision,” Zhang wrote. “We’ve always firmly protected the security of users’ data, the platform’s independence and transparency.”

Acknowledging that ByteDance is in negotiations with another tech firm, without naming Microsoft directly, the CEO wrote that the company is still engaged in internal discussions and no final decisions have been made. “The attention of the outside world and rumours around TikTok might last for a while,” Zhang said.

In a bid to salvage a deal for the US operations of TikTok, Microsoft CEO Satya Nadella spoke with US President Donald Trump by phone about how to secure the administration’s blessing to buy the wildly popular, but besieged, music video app.

Microsoft in a blog post on Sunday confirmed talks to buy TikTok’s operations in the US, as well as in Canada, Australia and New Zea- land, and they aim to complete the deal no later than Sept 15.

The software giant’s public statement follows closed-door discussions with TikTok and Trump, who floated plans for an outright ban of the app on national security grounds and publicly lambasted the idea of a deal late Friday night.

TikTok has become a flashpoint among rising US-China tensions in recent months as US politicians raised concerns that ByteDance could be compelled to hand over American users’ data to Beijing or use the app to influence the 165 million Americans, and more than two billion users globally, who have downloaded it. The app also drew ire from Trump after anti-Trump activists used the platform to disrupt campaign activities.

In its blog post, Microsoft pledged to add more security, privacy and digital safety protections to the TikTok app and ensure that all private data of Americans be transferred back to the US and deleted from servers outside the country. The company also said it might invite other American investors to take minority stakes in the company.

“Microsoft fully appreciates the importance of addressing the pres- ident’s concerns,” the company said. “It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the US, including the US Treasury.” — Bloomberg