Chinese company ByteDance, which owns the popular TikTok video app, has agreed to cede TikTok operations in the US, according to a Reuters report .
Under the agreement, Microsoft would take over the management of US user data, and another company besides Microsoft would operate TikTok in the United States.
This would allow the service to continue operating in the United States, circumventing the executive order that President Trump could sign at any time to ban the use of the app in the country.
ByteDance had allegedly previously sought a deal that would allow the company to retain a minority stake in the company. That plan was abandoned after the White House rejected the proposal.
ByteDance received a proposal from some of its investors, including Sequoia and General Atlantic, to transfer the majority ownership of TikTok to them. The proposal valued TikTok at about $ 50 billion, but some ByteDance executives believe the app is worth more than that.
ByteDance acquired the Shanghai-based video app Musical.ly in a $ 1 billion deal in 2017 and relaunched it as TikTok the following year. ByteDance did not request approval of the acquisition from the Committee on Foreign Investments in the United States (CFIUS), which reviews the deals to detect potential national security risks.
The United States has been increasingly investigating app developers regarding the personal data they handle, especially if some of it involves United States military or intelligence personnel.
Under the new agreement, Microsoft would be in charge of protecting the data of US users, and another US-based company would operate TikTok. It is unclear if this agreement would be sufficient to allow TikTok to continue operating within the United States.
This news comes hours after President Trump said he was going to sign an executive order that would ban the app from operating within the United States. The reason for this ban is the Trump administration’s fears that the app may share user data with the Chinese government.