US President Donald Trump has suggested that a “very substantial” cut of the proceeds generated by the potential sale of TikTok to Microsoft should be paid to the United States Treasury.
Trump also equated the country’s relationship with TikTok to that of a tenant and landlord, stating further that the US should be paid “key money” if a deal were to go through.
Trump’s comments follow Microsoft’s confirmation on Sunday (August 2) that it is in talks with Bytedance to acquire TikTok’s operations in the US and other markets. Reports first emerged on Friday (July 31) that discussions were taking place between the two parties.
The news of Microsoft’s interest in an acquisition comes after a number of challenging weeks in the US for TikTok.
The Trump administration has repeatedly suggested that the app could be banned in the market over security concerns, following India’s lead, which banned nearly 60 Chinese-owned apps last month.
According to the blog post published by Microsoft confirming the news, a conversation was held between Trump personally and Microsoft CEO Satya Nadella.
Microsoft’s blog post added that the Bill Gates-founded company “fully appreciates the importance of addressing the President’s concerns” and that it is “committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury”.
According to Trump, a deadline of September 15, 2020 has been set for TikTok’s US operations to be sold, or the company will face being banned from operating in the market.
Microsoft and ByteDance have notified the Committee on Foreign Investment in the United States (CFIUS) about their discussions, which potentially involve the purchase TikTok’s operations in the US, Canada, Australia, and New Zealand.
Microsoft added on Sunday that it “may invite other American investors to participate on a minority basis in this purchase”.
Speaking with reporters and tech workers yesterday (August 3) at a White House briefing, Trump was asked about his phone call with Nadella, to which he replied that they had “had a great conversation”.
He added, however, that “a very substantial portion” of a potential sale price “is going to have to come into the Treasury of the United States because we’re making it possible for this deal to happen”.
“The United States should be reimbursed or should be paid a substantial amount of money, because without the United States, they don’t have anything.”
Donald Trump
He added: “Right now, they don’t have any rights, unless we give it to them. So if we’re going to give them the rights, then it has to come into — it has to come into this country.
“It’s a little bit like the landlord/tenant: Without a lease, the tenant has nothing. So they pay what’s called “key money,” or they pay something.
“But the United States should be reimbursed or should be paid a substantial amount of money, because without the United States, they don’t have anything.”
You can read Trump’s remarks on TikTok in full below:
[Satya Nadella] called me to see whether or not — how I felt about it. And I said, “Look, it can’t be controlled, for security reasons, by China. Too big, too invasive, and it can’t be.” And here is the deal: I don’t mind if — whether it’s Microsoft or somebody else — a big company, a secure company, very — a very American company buy it. It’s probably easier to buy the whole thing than to buy 30 percent of it. Because they say, “How do you do 30 percent? Who’s going to get the name?” The name is hot; the brand is hot. And who’s going to get the name? How do you do that if it’s owned by two different companies?
So my personal opinion was: You’re probably better off buying the whole thing rather than buying 30 percent of it. I think buying 30 percent is complicated. And I suggested that he can go ahead. He can try. We set a date — I set a date at around September 15th, at which point it’s going to be out of business in the United States. But if somebody — and whether it’s Microsoft or somebody else — buys it, that’ll be interesting.
“a very substantial portion of that price is going to have to come into the Treasury of the United States because we’re making it possible for this deal to happen.”
Donald Trump
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, but more than anything else. I said a very substantial portion of that price is going to have to come into the Treasury of the United States because we’re making it possible for this deal to happen. Right now, they don’t have any rights, unless we give it to them. So if we’re going to give them the rights, then it has to come into — it has to come into this country.
It’s a little bit like the landlord/tenant: Without a lease, the tenant has nothing. So they pay what’s called “key money,” or they pay something. But the United States should be reimbursed or should be paid a substantial amount of money, because without the United States, they don’t have anything — at least having to do with the 30 percent.
So I told him that. I think we’re going to have — maybe a deal is going to be made. It’s a great asset. It’s a great asset. But it’s not a great asset in the United States unless they have the approval of the United States. So it’ll close down on September 15th, unless Microsoft or somebody else is able to buy it and work out a deal — an appropriate deal. So the Treasury of the — really, the Treasury, I guess you would say, of the United States gets a lot of money. A lot of money. Okay?
Mayer also criticised rival Facebook’s “maligning attacks”, which he added are “disguised as patriotism and designed to put an end to our very presence in the US”.
We also learned last week that one of TikTok’s biggest stars, Josh Richards, is leaving the platform, having formally been announced as an investor in US-based rival app Triller, which he will also be joining as Chief Strategy Officer.
Triller then sued TikTok lat week for allegedly infringing on a feature that allows users to stitch multiple videos together while using a single audio track.
Meanwhile, over 70% of TikTok users in the United States think the country’s government should not decide which apps they are permitted to access on their devices, according to a survey of TikTok users in the States by respected research and analysis company, MusicWatch.Music Business Worldwide
