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TikTok rejects Microsoft offer as rumours swirl over Oracle deal

Microsoft would have to make significant changes to its operations.

Microsoft has announced it will not buy TikTok’s US operations, sparking widespread overnight press coverage claiming the platform had instead struck a technology partnership with Oracle.

That deal is not yet confirmed, however, after China's state-run English television channel CGTN said on Monday that TikTok's parent company, Bytedance, would not give the source code for the video platform to any US buyers, reports Reuters.

Upon news of the Microsoft collapse, multiple reports surfaced suggesting Bytedance had swerved a sale and instead opted for a technology arrangement in order to appease US regulators. In addition, Reuters quoted a source as saying it would be a restructuring rather than a sale, with Oracle handling TikTok’s US user data.

TikTok has not commented on the reports.

Microsoft said while Bytedance was “confident our proposal would have been good for TikTok’s users, while protecting national security interests”, it would have to make significant changes to its operations.

“To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement,” said Microsoft.

What is happening at TikTok?

• President Donald Trump has passed two executive orders prohibiting American companies from doing business with WeChat and TikTok.

• The order comes into effect in 45 days, after the deadline set by President Trump for Microsoft and TikTok-owner Bytedance to hammer out a deal for a takeover of the platform's US operations.

• TikTok’s US user data is stored in the US and its biggest investors come from the US, but the Trump government believes the platform is sharing information with the Chinese government, citing China’s establishment of a sweeping new national security law for Hong Kong.

• The US wants to follow the example of India; the country’s Ministry of Electronics and Information Technology has placed a blanket ban on 59 mobile apps from Chinese companies that it said: “engaged in activities prejudicial to sovereignty and integrity of India, defence of India, the security of the state and public order”.

ByteDance is not keen to sell or transfer the algorithm behind TikTok in any sale or divestment deal, the South China Morning Post reported, quoting a source briefed on the Chinese company’s boardroom discussions and citing new Chinese government export controls.

TikTok’s chief executive Kevin Mayer has resigned, as the platform faces the threat of being banned in the United States.

• TikTok is still going full steam ahead with its social media marketing plans, despite a high-profile showdown with president Trump. It has tapped VaynerMedia to ramp up its marketing efforts on social media in the United States.

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