US President Donald Trump has said that the Treasury should receive a cut from a possible acquisition deal between Microsoft and TikTok.
According to President Trump, he demanded a "substantial portion"of the purchase price during a call he had with Microsoft regarding it's possible deal for the US unit of TikTok.
He also warned that he will ban Chinese tech firm ByteDance's video sharing app if no deal has been signed by September 15. ByteDance is being pressured to sell its US business after Trump declared a possible ban on Chinese tech companies.
US ban on TikTok
While talking to reporters on Air Force One during the flight back to Washington last week, the president said he has the authority to ban TikTok from the US.
"As far as TikTok is concerned we’re banning them from the United States," the president said, labeling the action as "severance".
He did not mention whether he will implement it through an executive order, or another process, such as a designation, the NBC News states.
"Well, I have that authority. I can do it with an executive order or that," Trump said.
The Trump administration could start the initiative of banning the app by ordering Apple and Google to remove it from their online stores.
This can be achieved by including TikTok’s owner Bytedance to a Commerce Department entity list, and forbidding US companies from working with it. This was the strategy used by the government to prevent Google from providing its apps to Huawei.
If this is accomplished, new users will not be able to download the app on their mobile devices while existing users will no longer be able to receive notifications and install updates but the app will still be on their devices.
Microsoft confirms bid to acquire Tiktok
Microsoft affirmed that its talks with the China-based company were about acquiring its social app TikTok in the US. According to Microsoft, it will continue working with the US government on a deal and plans to finalize the talks by September 15.
Microsoft’s statement comes two days after media outlets revealed the company’s interest in buying TikTok, which is owned by ByteDance.
"This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections," Microsoft said.
The tech giant added: "The operating model for the service would be built to ensure transparency to users as well as appropriate security oversight by governments in these countries."
A cut from the deal
President Trump said: "The United States should get a very large percentage of that price, because we're making it possible. It would come from the sale, which nobody else would be thinking about but me, but that's the way I think, and I think it's very fair."
The request for a US Treasury payment would further complicate the deal as legal experts pointed out that such payment for regulatory approval for a takeover deal is highly unorthodox.
DLA Piper lawyer Nicholas Klein explained that "the government doesn't have the authority to take a cut of a private deal through" the Committee on Foreign Investment, the inter-agency committee that reviews some foreign investments in the US.
