While tech giants circle TikTok, a local ban seems unlikely

With Donald Trump moving to ban TikTok, profiteers are already starting to circling. In the meantime, Australian users don’t need to worry about a potential ban….for now.

 

 

Twitter has begun courting ByteDance, TikTok’s Chinese parent company, to purchase the video-sharing platform’s US operations.

In case you missed it: Trump, originally planning to ban the app, has given ByteDance until September 15 to look for a potential buyer for TikTok in the US amid national privacy and security concerns. Pundits claim it is unlikely Twitter will be able to outbid Microsoft, the current front runner, and pull off such a transformative deal this far in time.


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Twitter has a market cap of close to $US30 billion, almost as much as the valuation of TikTok’s assets have been valued at. The social media giant would need to raise a great deal of capital to fund the deal, according to the Wall Street Journal.

“Twitter will have a hard time putting together enough financing to acquire even the US operations of TikTok. It doesn’t have enough borrowing capacity,” said Erik Gordon, a professor at the University of Michigan. “If it tries to put together an investor group, the terms will be tough. Twitter’s own shareholders might prefer that management focus on its existing business.”

Twitter is reportedly making the case that its bid would face less regulatory scrutiny than Microsoft’s and would not face any pressure from China given that Twitter does not operate in China.

Here in Australia, it is unlikely TikTok will be banned in the near future.

Scott Morrison has indicated that a ban on the app is “not necessary” but has warned Australians that the popular app “connects straight back to China”.

Analysts have advised that TikTok collects a plethora of user data from users and may be forced to share it with the Chinese government.

But the Prime Minister, after looking “very closely” at the app, has ruled out a ban, telling the Aspen Security Forum: “There’s nothing at this point that would suggest to us that security interests are being compromised, or Australian citizens are being compromised.”

“We’ll obviously keep watching them, but there’s no evidence to suggest to us today that is a step that is necessary.”

 

Scott Morrison has indicated that a ban on the app is “not necessary” but has warned Australians that the popular app “connects straight back to China”.

 

He added, however, that US-owned apps were more transparent when it comes to data collection than TikTok and acknowledged that data on the app could potentially be accessed at a “sovereign state level”.

“People need to understand where the extension cord goes back to,” he told the Forum.

“People should know that the line connects right back to China and they should exercise their own judgment about whether they should participate in those things or not.”

It is important to note that the potential deal between ByteDance and Microsoft in the US, if successful, could see TikTok’s Australian and Canadian arms being sold to Microsoft as well.

 

 

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