Chinese Executive: Forced Sale of TikTok May Be Inevitable Amid US Scrutiny

The Chinese company that owns popular video-sharing app TikTok is exploring all possibilities to ensure that its subsidiary can continue operating in the United States, according to a memo sent out Monday by Chief Executive Officer Zhang Yiming.Beijing-based ByteDance has come under pressure from Washington to sell off its U.S. TikTok operations over concerns that the company’s links to the Chinese government threaten the privacy of U.S. citizens.Secretary of State Mike Pompeo told Fox News on Sunday that President Donald Trump is likely to take action in the coming days. People familiar with the matter told Reuters that Trump agreed to give ByteDance 45 days to negotiate a sale to Microsoft.In the meantime, Microsoft said in a blog post Sunday that its CEO, Satya Nadella, and Trump had a conversation on the potential acquisition and “Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States.”Zhang, who founded ByteDance in 2012, said Monday that his teams are working around-the-clock “for the best outcome.” Without naming Microsoft directly, Zhang acknowledged that ByteDance is in negotiations with a tech firm, but “we have not decided on the final solution yet. The attention of the outside world and rumors around TikTok might last for a while,” he said.According to the memo that was reported in the Chinese media, Zhang complained to his employees that “the current geopolitical and public opinion environment is becoming more and more complex. TikTok’s U.S. business is facing the possibility of being forced to sell by CFIUS, or TikTok products may be banned in the United States due to administrative orders.”FILE – Tik Tok logos are seen on smartphones in front of a displayed ByteDance logo in this illustration taken Nov. 27, 2019.CFIUS, or the Committee on Foreign Investment in the United States, opened a review last year of the Musical.ly purchase that led to TikTok’s creation. Zhang also said that despite their willingness to adopt more technical solutions to allay Washington’s concerns, the company believes CFIUS will require it to sell the TikTok U.S. operation. “We do not agree with this decision,” he said.As TikTok surged to become one of the most popular apps in the world, Washington began calling for a national security investigation into the app. White House officials and lawmakers are worried what information TikTok shares with the Chinese government about the app’s roughly 100 million American users.Zhang emphasized again that TikTok is a privately run business.“We’ve always firmly protected the security of users’ data, the platform’s independence and transparency,” he said.U.S. officials have argued that such guarantees mean little because Chinese companies generally have no choice but to bend to Communist Party demands.On Monday China’s foreign ministry said it strongly opposed any U.S. actions against Chinese software companies, and it hoped the U.S. could stop its “discriminatory policies.”In an interview Monday with U.S. business news network CNBC, former Microsoft CEO Steve Ballmer called the company’s pursuit of TikTok “exciting.”“Price is important, as well as whatever restrictions come with it from a government perspective, but I think it’s an exciting avenue for Microsoft to really increase its consumer base,” he said.In the meantime, U.S. Senate Democratic Leader Chuck Schumer on Monday called for a U.S. company to purchase TikTok.“A U.S. company should buy TikTok so everyone can keep using it and your data is safe,” he said in a tweet, “With TikTok in China, it’s subject to Chinese Communist Party laws that may require handing over data to their government.”
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