It’s reported by the Financial Times on 5 August 2020 that the founder of TikTok has defended a plan to sell the US arm of the viral video app, as his investors threw their support behind a bid for the business by Microsoft.
Is there sufficient rationale for Microsoft to acquire TikTok?
It’s mentioned by the Financial Times in the report The challenges Microsoft faces in buying TikTok’s US arm that Microsoft is by far the most trusted US tech company in China and its largest R&D centre outside US is in Beijing. A former Microsoft China executive said if another company had acquired TikTok, it would have inflamed more “nationalism” in China. There was insufficient business rationale for Microsoft to conduct this transaction because Microsoft has often failed in pure consumer products and has a decidedly mixed record with acquisitions and has not been very successful historical deals focusing on consumers [or] advertising.
It’s also reported by the Financial Times on 10 April 2019 that Microsoft has worked with a Chinese military-run university on artificial intelligence research that could be used for surveillance and censorship. There are 3 papers, published between March and November in 2018, co-written by academics at Microsoft Research Asia in Beijing and researchers with affiliations to China’s National University of Defense Technology of Chinese Communist Party(CCP) Central Military Commission.
It’s reported by The National Pulse that Microsoft attended CCP’s AI Conference alongside Chinese military proxies and for decades. American corporates have soughtto further expand market access in China, neglecting national security and data privacy concerns in the name of profit.
Bill Gates, the Microsoft billionaire, chairs a nuclear power initiative working alongside a Chinese energy company deemed a military asset by the U.S. government. Gates has also extolled China’s economic exploitation of Africa as “valuable” and “beneficial.” Terrapower, a nuclear energy research company founded and chaired by Gates, works with China National Nuclear Corporation (CNNC), a wholly government-funded and administered company. The state-owned enterprise is involved with “the development of China’s nuclear energy programs, both civilian and military.” The U.S. Department of Defense had quietly identified CNNC as a Chinese military collaborator since 1999. Should Microsoft be identified and registered as a foreign agent with The Department of Justice?
Will CCP “solve” American Security Concern by Selling TikTok to Microsoft?
There are fiscal budgets that can be modified easily by CCP for technology advancement each year in China. The budgets are classified into general budgets and special project budgets. In the special project budgets, there will be CCP technology advancement compensation arrangement specifically designed for paying the cost incurred by Microsoft China’s TikTok acquisition cost. In the compensation arrangement, there will be terms and conditions, which is equal to contract that requires Microsoft to conform with CCP’s “national security interest and regulations” that must be satisfied by the payee. However, it’s more often that the real terms and conditions are notified orally or via telephone call that is not subject to recording.
The whole transaction will be that Microsoft applies for fiscal compensation that will be approved very quickly and budget adjusted quickly after being notified by CCP’s National Security Agent, and acquires TikTok by using funds in America and then gets granted. The approvement documents may specify that Control over TikTok shall be exercised by CCP’s National Security officials.
How To Judge Control Over TikTok?
It’s indicated both in the International Financial Reporting Standards and US GAAP that CCP’s control over TikTok can exist through contract, majority voting power in a governance body or other arrangements rather just through shareholding. Therefore, it’s totally absurd to judge that the control over TikTok will be transferred from CCP to Microsoft given that Microsoft is an agent of CCP in essence.
Consumer’s privacy concern should preside over all the business concern and we should not trust lies told by CCP through Microsoft indirectly.
CCP is a totalitarian company that uses TikTok, a tool, to commit crimes. One effective solution to this problem for America is to obtain control of CCP by requiring CCP to exchange its coronavirus liability for American equity control of CCP, that is debt is converted to equity, and disband the CCP.
Current solution is in effect covering up the substance of control. Even though CCP sells shares of TikTok to Microsoft and collects dollars but it can then give back Microsoft money in Chinese Yuan or free land, subsidies or other privilege to Microsoft China to retain control of TikTok through agreement.
Americans should learn from past mistakes of being played games by CCP. Microsoft is silent on the problem that the widely used Chinese WPS for free used similar technologies of Microsoft Office. Don’t count on Microsoft on upholding security and privacy of Americans. Please stop dreaming.
CCP lied, Americans died.
Author: CPA Jim
(The above content only represents the author’s personal opinion)