President Trump said Monday that he would allow an American company to acquire the video app TikTok, but that any deal would have to include a "substantial amount of money" going to the U.S. Treasury.
Microsoft is looking to buy the app, reportedly used by some 100 million Americans, from Chinese company ByteDance. Trump said he will ban TikTok if it doesn't find an American buyer by September 15.
“The U.S. should get a very large percentage of that price, because we’re making it possible,” Trump told reporters. He compared the payment to “key money,” or cash paid by a prospective tenant to secure a lease from a landlord. The White House wouldn’t say how the administration could force either party in any deal to pay the Treasury, or how such a payment would work, the Financial Times reports.
Trump and others have expressed national security concerns over the app, suggesting that it could pose data privacy and censorship risks because of its Chinese ownership and the influence of the Chinese Communist Party. TikTok has pushed back against those claims and security experts have said the risks the app poses are less direct than politicians have suggested.
In a blog post over the weekend, Microsoft said it “fully appreciates the importance of addressing the President’s concerns. 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.”
Why it matters: Trump’s requirement is highly unusual, Gene Kimmelman, a former chief counsel for the Department of Justice's Antitrust Division and currently a senior adviser to the policy group Public Knowledge, told CNN: “It's not unheard of for transactions to have broader geopolitical implications between countries, but it's quite remarkable to think about some kind of money being on the table in connection with a transaction."
Others put it more bluntly. “This is akin to extortion — the sort of thing you'd expect to hear on a wiretap, not from the White House in front of reporters,” Axios’s Dan Primack writes. He adds that there’s still no guarantee any deal will get done by Trump’s deadline, let alone one that meets his stated terms. “If not,” Primack says, “he'll either have to ban a service beloved by tens of millions of voters, less than two months before the election, or kick the can down the road.”
