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Twitter and TikTok hold ‘preliminary talks’ on MEGA deal even as Trump labels Chinese app a security threat

TWITTER and TikTok have held preliminary talks to potentially join forces in a negotiation which would fly in the face of Trump’s ban order.

The Chinese-owned video-sharing app is racing against a September deadline to find a buyer for its US operations or face a nation-wide ban after being declared a national-security threat by the Trump administration on Thursday.

A deal would involve TikTok’s U.S. operations, people familiar with the matter told The Wall Street Journal.

Last week, Microsoft said it wants to buy TikTok’s entire global operation, and has been negotiating for weeks with patent company Beijing-based ByteDance.

The software giant is considered the front-runner for any possible deal, with CEO Satya Nadella even discussing the issue with President Trump, according to the people.

Twitter, which is much smaller than Microsoft and would have a harder time paying for the deal, is seen as a long-shot bidder with Microsoft reportedly further advanced in negotiations.

But due to its smaller size, Twitter has reasoned that it would be unlikely to face the same level of antitrust scrutiny as Microsoft or other potential bidders, said people familiar with the discussions.

Twitter’s market capitalization is about $29 billion and Microsoft’s is more than $1.6 trillion, the WSJ reports.

With less financial firepowe, Twitter would need help from other investors to buy TikTok such as high-powered private-equity firm Silver Lake.

Twitter started making a consistent profit in the past couple of years, but reported a $1.23 billion loss in the latest quarter.

The company reported $7.8 billion in cash and short-term investments as of June, compared with more than $136 billion for Microsoft.

Microsoft said it was negotiating for TikTok’s operations in the U.S., Australia, Canada and New Zealand.

Unlike Microsoft, Twitter does not operate in China. China blocked access to Twitter in 2009.

Trump issued his executive order banning TikTok in the US and giving its parent company ByteDance 45 days to sell the app.

The social media app will be banned on September 20 if its parent company ByteDance doesn’t sell its American operations.

The order claims that TikTok “may also be used for disinformation campaigns that benefit the Chinese Communist Party,” and specifically cites TikTok videos that “spread debunked conspiracy theories about the origins of the 2019 Novel Coronavirus”.

It also states that the company “reportedly censors content that the Chinese Communist Party deems politically sensitive, such as content concerning protests in Hong Kong and China’s treatment of Uyghurs and other Muslim minorities”.

“At this time, action must be taken to address the threat posed by one mobile app in particular, TikTok,” the order says.

“TikTok automatically captures vast swaths of information from its users, including internet and other network activity information such as location data and browsing and search histories.

“This data threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information, potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.”

According to a news release issued by the White House on Thursday, Trump said: “These risks are real.”

“The Department of Homeland Security, Transportation Security Administration, and the United States Armed Forces have already banned the use of TikTok on Federal Government phones,” the statement continued.

“The United States must take aggressive action against the owners of TikTok to protect our national security.”

Trump also signed another executive order banning the mobile app WeChat because it posed a “similar threat.”

Parent company ByteDance has denied that it shares data with the Chinese government, and Chinese state media blasted the US response to TikTok as “madness”.

Beijing slammed the orders as “arbitrary political manipulation and suppression” and said it would come at the expense of American users and companies.

Earlier on Sunday, TikTok was reported to be preparing to file a federal lawsuit against the Trump administration over the executive order banning the app.

The lawsuit will reportedly argue that the nation-wide ban is “unconstitutional” and the national security concerns are “baseless”.

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