Trump’s ‘Mafia shakedown’ of TikTok could ripple across tech industry

Linda J. Dodson

The announcement resembled a dedication to some old-world monarch. “Microsoft fully appreciates the importance of addressing the President’s concerns,” it said.

“Microsoft looks forward to continuing dialogue with the United States Government, including with the President,” it went on. Then the cherry on top: “Microsoft appreciates the US Government’s and President Trump’s personal involvement.”

So read the company’s notice that it would press forward with negotiations to buy TikTok, the Chinese viral video app which came alarmingly close to a total US ban last weekend. An eleventh-hour conversation between Trump and Microsoft’s chief executive, Satya Nadella, revived the chance of a deal – and Microsoft was clearly keen to give Mr Trump his due.

But if the President’s forceful personal intervention raised eyebrows among business leaders, that was nothing to his next proposal. “A very substantial portion of that price is going to have to come into the Treasury of the United States, because we’re making it possible for this deal to happen,” he told reporters.

“Right now they don’t have any rights unless we give it to ’em… it’s a great asset, but it’s not a great asset in the US unless they have the approval of the US.”

Trump’s nakedly transactional tone – as well as his apparent ground assumption that any corporate deal in a free market economy should be subject to his personal veto – constitutes a new level of intervention in tech markets, theoretically going far beyond cases where national security is at stake.

Matt Levine, a columnist for Bloomberg, summarised his message as “America: we will expropriate the assets of foreign companies if someone pays us a big enough bribe.”

That raises pressing questions for any tech firm hoping to receive investment from or be acquired by foreign companies. Will all future overseas deals require them to kiss Trump’s ring as Microsoft did? And if so, given the President’s mercurial negotiating methods, will they be worth bothering with at all?

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