TikTok waits on British support before confirming plan for London base

The US$3.9 billion proposal has provoked a split between British ministries and risks Boris Johnson’s US relationship
Spokesman for prime minister says it would be a ‘commercial decision’

TikTok

Stuart Lau

Published: 1:00pm, 10 Aug 2020

Why you can trust SCMP

TikTok is unwilling to confirm a plan to move its headquarters from the US to London without a public statement of support from the British government, the South China Morning Post has learned.

But Prime Minister Boris Johnson is facing a split among his ministers over the £3 billion (US$3.9 billion) investment promised by the video-sharing app controlled by China’s ByteDance, according to multiple sources with knowledge of the situation.

“TikTok has been sitting on the plan to relocate to London for weeks, pending a positive response from the government,” a source said. “If the government would not speak out in its favour, it would be very difficult for TikTok to make the move.”

Profits, not political agendas, drive Chinese businesses to go global

The company has not replied to a request for comment. Last week, ByteDance said it had been “evaluating the possibility of establishing TikTok’s headquarters outside of the US to better serve our global users” without specifying where.

A spokesman for Johnson earlier said “it would be a commercial decision, and I’m not aware that one has been taken”.

While Johnson has taken a hard line on Hong Kong and Huawei Technologies – which will be banned from Britain’s 5G networks from next year – he has called for cooperation with Beijing on other issues, and is cautious of being seen as following Washington’s China-bashing politics.

But for Johnson, or his officials, to put out a public display of solidarity with TikTok would risk uncertainty in his relationship with President Donald Trump, who last week signed an executive order, to take effect in 45 days, banning all dealings with TikTok and WeChat, another Chinese social media app.

Crucially, it is understood that Oliver Dowden, the British secretary for digital, culture, media and sport, harboured reservations about the TikTok deal. Dowden was the minister who announced the Huawei ban last month in Parliament, where he vowed to be “clear-eyed” about “high-risk” Chinese tech firms.

On the other hand, the Foreign Office was in support of the TikTok proposal, according to a source, so far as the app was not considered a risk under Britain’s national security assessment.

Microsoft has said it is seeking to buy the assets of TikTok in North America, Australia and New Zealand – which British officials considered an attempt to drive a wedge between Britain and the rest of the Five Eyes security network.

Microsoft has not disclosed how much it is willing to pay, though sources previously told Reuters that ByteDance executives valued all of TikTok at more than US$50 billion.

Reuters also reported that its sources had rebutted a Financial Times report that Microsoft was chasing a deal to buy all of TikTok’s global business – potentially adding regions including India and Europe to the deal.

01:41

India’s TikTok ban closes lucrative window to the world for many rural women

India banned 59 Chinese-owned apps, including TikTok and Tencent’s WeChat, following a confrontation with China at a disputed Himalayan border site, which left 20 Indian soldiers dead. TikTok had 200 million users in India.

Meanwhile, TikTok last week said it was planning to build a US$500 million data centre in Ireland to store videos, messages and other data generated by European users from the short-form video-sharing app. Until now all of its users’ records have been stored in the US, with a backup copy held in Singapore.

This article appeared in the South China Morning Post print edition as: Britain divided over firm’s plan to move HQ

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