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If Microsoft ends up buying TikTok could the US government demand a cut? The American tech giant has been in discussions with ByteDance, the Chinese owner of the popular video sharing platform, for the last few weeks over a potential acquisition. Those talks began after Donald Trump threatened to ban TikTok altogether, warning that the data of American TikTok users might not be safe in the hands of a Chinese-owned company.
Now, the two parties are hoping to come to some sort of agreement by mid-September, a deadline made even more urgent by Mr Trump's latest threat to cut TikTok off from any US transactions in 45 days time if it is not done by then. But one of the major hurdles here will be Donald Trump's repeated insistence that the Treasury should get some kind of payment for helping engineer the sale in the first place.
Lawyers and policymakers that I talked to in Washington have no idea how the mechanics of such a payment would work. It is not unprecedented for the Treasury to demand a one-off payment from a private company, but that usually happens when the private company is asking something of the US taxpayer. For example, if there is a bailout, there is often a fee associated with this. This, however, is not a bailout situation. This is a situation where the US government has engineered a sale by threatening to ban one company altogether. One lawyer I spoke to said this doesn't so much resemble a fee as a shakedown.
Now, Microsoft themselves say that they are committed to providing economic benefit to the US and, particularly, to the Treasury. But what they probably mean by that is some kind of promise over future tax payments. I doubt they're thinking of a single, one-off fee to the Treasury. If the Treasury does demand such a payment, however, I would expect that that could kick off a long and protracted legal battle.
