Heisenberg Report

Trump To Drop Hammer On TikTok As Microsoft Said To Show Interest

After months of speculation, Donald Trump will move to force TikTok parent ByteDance to sell the popular video app, marking the latest escalation in the multi-faceted feud between the world’s two superpowers.

TikTok is a source of considerable consternation for administration officials, who have spent the last several weeks dropping hints about a possible US ban, predicated on national security concerns. Some US companies have expressed reservations about employees downloading the app, and the Biden campaign recently ordered staffers to remove it from their phones.

Ostensibly, concerns center around the possibility that Beijing is using TikTok as a kind of Trojan horse to collect data on Americans.

Earlier this month, an amendment banning the app from government devices was attached to the annual defense spending bill. In January, The Pentagon warned military personnel to delete TikTok. Wells Fargo has barred it from company devices.

Sino-US tensions ratcheted materially higher last week with the forced closure of the Chinese consulate in Houston and an in-kind shuttering of the US mission in Chengdu. And that’s to say nothing of Mike Pompeo’s abrasive speech in California and visa fraud charges leveled against a handful of Chinese researchers.

In a sign of Bytedance’s efforts to assuage US worries, the company installed Disney’s top streaming executive, Kevin Mayer, as CEO in May. Mayer took aim at Mark Zuckerberg this week after the Facebook mogul jabbed at TikTok in prepared remarks for congressional testimony.

“Let’s focus our energies on fair and open competition in service of our consumers, rather than maligning attacks by our competitor – namely Facebook – disguised as patriotism and designed to put an end to our very presence in the US”, Mayer wrote, in a blog post.

He wasn’t done. “Facebook is even launching another copycat product, Reels (tied to Instagram), after their other copycat Lasso failed quickly”, he chuckled.

TikTok was also in the process of evaluating options for altering its corporate structure.

“A small group of ByteDance’s US investors is discussing with the company’s top management the possibility of joining forces to buy a majority stake in TikTok as it grows more difficult for the Chinese-owned company to keep control of the fast-growing video app”, The Information reported on July 21, citing people familiar with the situation, who said “the idea is just one possible scenario ByteDance is examining as it explores ways of dealing with a possible US ban or forced divestiture”.

That forced divestiture was set to become a reality as soon as Friday, according to sources who spoke to Bloomberg, whose Jennifer Jacobs and Saleha Moshin said an announcement was imminent.

Trump subsequently said he may ban TikTok, but is still exploring alternatives.

Fox Business cited bankers in reporting that Microsoft is in talks to buy TikTok’s US operations.

Whatever the case, one thing seems certain: TikTok will not be allowed in America without implementing sweeping organizational changes sufficient to placate US officials and lawmakers.

The company is, like Huawei, a pariah. And a popular one at that.

As Bloomberg’s Jacobs dryly notes in her coverage, “Trump’s threat to ban TikTok came just a few weeks after reports that many TikTok users had tried to sabotage a campaign rally by requesting tickets they never planned to use”.