Will Microsoft Buy TikTok?

TikTok really ought to be history by now. The law banning it from appearing on app stores took effect on January 19 and it did shut down very briefly. But on inauguration day President Trump signed an executive order granting the company a 75-day extension, even though nothing in the law allows for that. USA Today describes the current situation as a “gray area” legally speaking.

Ben Sperry, senior scholar at the International Center for Law & Economics, said the executive order falls into a “gray area.” Under federal law, it remains illegal for U.S. companies, like internet hosting services and app stores, to maintain, distribute and update TikTok, as the platform remains owned by Chinese company ByteDance. However, Trump’s order invites companies to “break” this law, under the impression they will not face repercussions, Sperry said…

In short, Trump and his administration are taking advantage of “prosecutorial discretion,” Sperry said. Prosecutorial discretion is the power of the government to decide how to apply a law to a person, or in this case, companies.

“You could, and I’m sure the defenders of the executive order would say this, argue that they’re just using their prosecutorial discretion here to do what’s in the public interest,” Sperry said.

Prosecutorial discretion has been used as an excuse for all sorts of legal mischief. You may remember that DACA, created out of whole cloth by the Obama administration, was framed as an act of prosecutorial discretion. Similarly, the decision not to only pursue illegal immigrants for deportation if they’ve been charged or convicted of crimes (or only certain violent crimes) is also based on prosecutorial discretion.

The good news in this case is that Trump seems to have jammed his foot in the closing door for good reason. He’s clearly looking to put together a deal for some US buyer to purchase the company, or at least a majority stake, and thus save it. Over the weekend there were suggestions the buyer might be Oracle.

The Trump administration is working on a plan to save TikTok that involves tapping software company Oracle and a group of outside investors to effectively take control of the app’s global operations, according to two people with direct knowledge of the talks.

Under the deal now being negotiated by the White House, TikTok’s China-based owner ByteDance would retain a minority stake in the company, but the app’s algorithm, data collection and software updates will be overseen by Oracle, which already provides the foundation of TikTok’s web infrastructure…

“The goal is for Oracle to effectively monitor and provide oversight with what is going on with TikTok,” said the person directly involved in the talks, who was not authorized to speak publicly about the deliberations. “ByteDance wouldn’t completely go away, but it would minimize Chinese ownership.”

You may remember that as the possibility of a ban was being discussed, TikTok attempted to put an end to the discussion with something they called “Project Texas” which was basically having all US data stored on Oracle servers in Texas. Obviously that plan didn’t work because no one could really guarantee that Chinese ByteDance employees weren’t accessing that data at will.

In any case, Oracle may not be the only possible buyer. Yesterday President Trump suggested Microsoft may also be interested.

US President Donald Trump has said Microsoft is in discussions to acquire TikTok and that he would like to see a “bidding war” over the sale of the social media app.

When asked by reporters whether the US tech giant was preparing a bid, Trump replied: “I would say yes” – before adding that there was “great interest in TikTok” from several companies…

Earlier on Monday, the US president had addressed a gathering of Republican politicians in Florida and spoke about the proposed sale of TikTok.

“We’ll see what happens. We’re going to have a lot of people bidding on it,” he said.

“If we can save all that voice and all the jobs, and China won’t be involved, we don’t want China involved, but we’ll see what happens,” he added.

Nothing is final yet but there has been some important movement lately. China is now backing away from saying TikTok can never be sold.

Chinese regulators, who have for years opposed the selling of TikTok, recently signaled that they would not stand in the way of a TikTok ownership change, saying acquisitions “should be independently decided by the enterprises and based on market principles.” The statement, at first, does not seem to say much, but negotiators in the White House believe it indicates that Beijing is not planning to block a deal that gives American investors a majority-stake position in the company.

So maybe this gray area will turn out to be a good thing. If TikTok can be taken out of China’s hands and preserved that’s probably the best case scenario for everyone.