Retail giant Walmart is forming a partnership with tech giant Microsoft to try to purchase the US operations of TikTok amidst political scrutiny.
According to Walmart, it is currently negotiating with Microsoft over a potential deal to acquire the US operations of the popular yet controversial short-form video app TikTok.
The Chinese-owned firm is being pressured to find a US buyer after US President Donald Trump issued an executive order.
Political pressure and US sale
Earlier this month, President Trump issued executive orders that would ban TikTok and WeChat in the US in 45 days if sold by their Chinese-owned parent companies.
The TikTok order states that after 45 days, “any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd.,” will be prohibited.
The order also makes the accusation that the social media platform “automatically captures vast swaths of information from its users,” such as location data and browsing and search histories, which “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.”
Prior to the issuance of the orders, 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.
“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 operating model for the service would be built to ensure transparency to users as well as appropriate security oversight by governments in these countries.”
Walmart's involvement
According to the retail company, its interest in TikTok comes from the way the app has "integrated e-commerce and advertising capabilities in other markets" and could bolster its access to consumers.
In a statement, Walmart said: "We believe a potential relationship with TikTok US in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses."
"We are confident that a Walmart and Microsoft partnership would meet both the expectations of US TikTok users while satisfying the concerns of US government regulators," the firm added.
TikTok CEO quits
Walmart's announcement comes hours after TikTok's chief executive officer (CEO) Kevin Mayer resigned from his post.
Mayer said in a memo to employees: "In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for."
"It is with a heavy heart that I wanted to let you all know that I have decided to leave the company," he wrote.
He also mentioned in his letter that they should expect "a resolution very soon," possibly indicating that a deal could be reached within the next week.
