TikTok sale ‘uncertain’ as Trump ban looms

A man wearing a shirt promoting TikTok is seen at an Apple store in Beijing. US President Donald Trump says he wants to take action to ban TikTok. (AFP/File)
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Updated 03 August 2020

TikTok sale ‘uncertain’ as Trump ban looms

  • Opposition to the deal prompts the app to make further concessions, including adding 10,000 jobs in US

SAN FRANCISCO: Negotiations for Microsoft to buy the US operations of Chinese-owned TikTok are on hold after President Donald Trump threatened to bar the social media app and came out against the sale, the Wall Street Journal reported Saturday.
Trump has pledged to get tough on the massively popular video-sharing app, which US officials have said could be a tool for Chinese intelligence — a claim the firm, owned by Chinese internet giant ByteDance, has repeatedly denied.
While there has been no sign yet of the ban he threatened on Friday to impose, his words were reportedly already adding to uncertainties for TikTok.
“Before Mr. Trump’s remarks, the two sides believed the broad strokes of a deal could be in place by Monday,” the paper reported on a possible TikTok-Microsoft sale, citing unnamed sources.
It also said Trump’s threats and opposition to the deal had prompted TikTok to make further concessions, including adding up to 10,000 jobs in the US over the next 3 years.
TikTok defended itself on Saturday, with its general manager for the US, Vanessa Pappas, telling users that the company was working to give them “the safest app,” amid US concerns over data security. “We’re not planning on going anywhere,” Pappas said in a message released on the app.
TikTok, especially popular with young audiences who create and watch its short-form videos, has an estimated 1 billion users worldwide.
It has grown even faster as the coronavirus pandemic has pushed people physically away from each other, but into close contact online.

SPEEDREAD

• President Donald Trump has pledged to get tough on the app, which US officials have said could be a tool for Chinese intelligence — a claim the firm, owned by Chinese Internet giant ByteDance, has repeatedly denied.

• While there has been no sign yet of the ban he threatened on Friday to impose, his words were reportedly already adding to uncertainties for TikTok.

Earlier media reports had suggested Trump would require that the app’s US operations be divested from ByteDance, but he instead announced a ban.
Trump’s announcement drew criticism from some in the tech sector, including former Facebook chief security officer Alex Stamos, who questioned whether the move was spurred by national security concerns.
“A 100 percent sale to an American company would have been considered a radical solution two weeks ago and, eventually, mitigates any reasonable data protection concerns,” he wrote on Twitter.
The American Civil Liberties Union cried foul over the possibility of a ban on the app.
“Banning an app that millions of Americans use to communicate with each other is a danger to free expression and is technologically impractical,” said the ACLU’s surveillance and cybersecurity counsel, Jennifer Granick.
“With any I internet platform, we should be concerned about the risk that sensitive private data will be funneled to abusive governments, including our own,” Granick said in a statement.
“But shutting one platform down, even if it were legally possible to do so, harms freedom of speech online and does nothing to resolve the broader problem of unjustified government surveillance.”
Pappas said she was “proud” of TikTok’s 1,500 US employees, and also noted the “additional 10,000 jobs” the company plans on creating in the US in the next 3 years.
“When it comes to safety and security, we’re building the safest app because we know it’s the right thing to do,” she said.
“So we appreciate the support. We’re here for the long run, and continue to share your voice here and let’s stand for TikTok.”


Big week for Big Tech as earnings, hearings loom

Updated 25 October 2020

Big week for Big Tech as earnings, hearings loom

  • The four giants drawing the most scrutiny — Apple, Amazon, Facebook and Google — have been wildly successful in recent years

SAN FRANCISCO: Big Tech is bracing for a tumultuous week marked by quarterly results likely to show resilience despite the pandemic, and fresh attacks from lawmakers ahead of the Nov. 3 election.

With backlash against Silicon Valley intensifying, the companies will seek to reassure investors while at the same time fend off regulators and activists who claim these firms have become too dominant and powerful.

Earnings reports are due this week from Amazon, Apple, Facebook, Microsoft, Twitter and Google-parent Alphabet, whose combined value has grown to more than $7 trillion.

They have also woven themselves into the very fabric of modern life, from how people share views and get news to shopping, working, and playing.

Robust quarterly earnings results expected from Big Tech will “highlight the outsized strength these tech behemoths are seeing” but “ultimately add fuel to the fire in the Beltway around breakup momentum,” Wedbush analyst Dan Ives said in a note to investors.

The results come amid heightened scrutiny in Washington of tech platforms and follow a landmark antitrust suit filed against Google, which could potentially lead to the breakup of the internet giant, illustrative of the “techlash” in political circles.

Meanwhile, Senate Republicans have voted to subpoena Jack Dorsey and Mark Zuckerberg, the chief executives of Twitter and Facebook respectively, as part of a stepped-up assault on social media’s handling of online political content, notably the downranking of a New York Post article purported to show embarrassing information about Democrat Joe Biden.

CEOs of Twitter, Facebook and Google are already slated to testify at a separate Senate panel on Wednesday examining the so-called Section 230 law, which offers liability protection for content posted by others on their platforms.

The four giants drawing the most scrutiny — Apple, Amazon, Facebook and Google — have been wildly successful in recent years and have weathered the economic impact of the pandemic by offering needed goods and services.

Google and Facebook dominate the lucrative online ad market, while Amazon is an e-commerce king.

Apple has come under fire for its tight grip on the App Store, just as it has made a priority of making money from selling digital content and services to the multitude of iPhone users.

The firms have stepped up lobbying, spending tens of millions this year, and made efforts to show their social contributions as part of their campaign to fend off regulation.

“For the most part, tech companies know how to do this dance,” said analyst Rob Enderle of Enderle Group.

“They don’t spend a lot of time bragging about how well they have done any more.”

Ed Yardeni of Yardeni Research said the outlook for Big Tech may not be as rosy as it appears.

“For one, regulators at home and abroad are gunning to rein in some of the largest US technology names,” Yardeni said in a research note.

Of interest to the market short-term will likely be whether backlash about what kind of content is left up and what is taken down by online titans causes advertisers to cut spending on the platforms.

Economic and social disruption from the pandemic also looms over tech firms, which benefitted early in the pandemic as people turned to the internet to work, learn, shop and socialize from home.

“Performance will be best for those providing solutions for people working at home,” analyst Enderle said.

Amazon, Google and Microsoft each have cloud computing divisions that have been increasingly powering revenue as demand climbs for software, services and storage provided as services from massive datacenters.

Amazon has seen booming sales on its platform during the pandemic, and viewing surge at its Prime streaming television service.

Enderle expressed concern that with the coronavirus disease (COVID-19) cases and a lack of new stimulus money in the US, tech companies could reveal in forecasts that they are bracing for poorer performance in the current quarter.