Microsoft mulls buying TikTok as US considers action against other Chinese companies. Russia vows retaliation for EU sanctions.

Summary

By the CyberWire staff

At a glance.

Microsoft in talks to buy TikTok.
EU sanctions against Russian, Chinese, DPRK entities draws Russian ire.

Onshoring to mitigate a security threat.

Microsoft said yesterday that it was in continuing talks to acquire TikTok, the social platform currently owned by Chinese firm's ByteDance. The company attributes its decision to talks between its chairman and US President Trump: "Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States." Reuters has reported that ByteDance has agreed to divest its holdings in TikTok to a US owner.

The announcement came after the President's statement Friday, reported in the Washington Post, that he intended, on security grounds to ban TikTok from operating in the US. The security issue arises because of the large quantity of personal information the company collects on its users, including their connections with other users. Whatever the details of any purchase, the Wall Street Journal says that the President suggested that some of the money should go into the US Treasury, given the Government's central role in brokering the deal.

TikTok is unlikely to be the last Chinese software firm to face restrictions on its ability to operate in the US. According to the Los Angeles Times, Secretary of State Pompeo has suggested that other firms will soon be receiving similar close scrutiny.

EU sanctions get US applause and a promise of Russian retaliation.

After the European Union announced sanctions against Russian, Chinese, and North Korean organizations and individuals last week, concentrating on those connected with CloudHopper, WannaCry, NotPetya, and a GRU attempt against the Organisation for the Prohibition of Chemical Weapons, Representative Jim Langevin (Democrat, Rhode Island 2nd District) applauded the move. He saw it as a positive example of the use of sanctions, and as evidence of growing ability to attribute cyberattacks.

The Russian government, foreseeably, was unhappy with the EU's steps. Reuters reports that the Russian Foreign Ministry said that Moscow would reply in kind, with reciprocal measures. “Of course this unfriendly action by the EU will not be left unanswered,” the Foreign Ministry said. What the answer would be was left unspecified.

Selected Reading

Microsoft confirms plans to buy TikTok after 'personal' talk with Donald Trump (The Telegraph) The company said it was 'prepared to continue' talks to rescue the stricken Chinese app – though a deal is not certain

Microsoft to continue discussions on potential TikTok purchase in the United States (The Official Microsoft Blog) Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States.

Microsoft Said to Be in Talks to Buy TikTok, as Trump Weighs Curtailing App (New York Times) The discussions come as TikTok’s ownership by a Chinese company is under scrutiny by the White House and lawmakers.

Microsoft Is in Talks to Acquire TikTok, as U.S. Considers Banning the App (Wall Street Journal) Microsoft is in advanced talks to acquire the U.S. operations of the Chinese-owned video app TikTok, according to people with knowledge of the discussions, in a deal that would be a concession to White House pressure and make the software giant a major player in social media.

Microsoft’s Talks to Buy TikTok Follow Headwinds for Investor Plan (The Information) Microsoft is in serious talks to acquire TikTok, the hugely popular Chinese-owned video app, The Information has confirmed, after separate talks for a U.S. investor group to buy the app ran into headwinds on both political and business grounds.Senior ByteDance executives see Microsoft as more ...

UK telecommunications group BT says Huawei ban has not affected operations (Deccan Chronicle) UK this month reversed the decision in January to allow China’s controversial technology leader to roll out Britain’s fast new data network.

Russia pledges reciprocal steps after EU sanctions for alleged cyberattacks (Reuters) Russia's Foreign Ministry said on Friday it would respond with reciprocal measures to European Union travel and financial sanctions against a department of Russia's military intelligence service for alleged cyberattacks.

U.S. Slaps Sanctions on Xinjiang’s Vast Paramilitary Settler Corps (Foreign Policy) Beijing is likely to react strongly to the first targeting of high-level officials and a government body.

How fair are practices of tech giants in India? (ET CIO) If the tech giants are suspected of crushing competition and lax about privacy and data protection in the US, they could be doing so in India too

Trump to Order China’s ByteDance to Sell TikTok in U.S. (Bloomberg) President Donald Trump plans to announce a decision ordering China’s ByteDance Ltd. to divest its ownership of the music-video app TikTok, which is popular with U.S. teens, according to people familiar with the matter.

Trump says he plans to bar TikTok from operating in the U.S. (Washington Post) “As far as TikTok is concerned, we’re banning them from the United States,” he told reporters aboard Air Force One.

U.S. to act on China software beyond TikTok, Pompeo says (Los Angeles Times) The Trump administration will announce measures shortly against “a broad array” of Chinese-owned software deemed to pose national security risks, Secretary of State Michael R. Pompeo said.

Trump takes aim at Chinese tech firms (The Telegraph) Microsoft deal to buy TikTok put on hold after President threatens to ban the app and take wider action on national security grounds

US to widen action against Chinese tech groups beyond TikTok (Financial Times) Pompeo vows further clampdown as ByteDance tries to salvage sale talks with Microsoft

Langevin Applauds EU Cyber Sanctions (Meritalk) Rep. Jim Langevin, D-R.I., chairman of the House Armed Services Committee's Subcommittee on Intelligence and Emerging Threats and Capabilities, voiced support at a July 30 subcommittee hearing for the European Union’s placement of sanctions on Russian, Chinese, and North Korean entities for their role in high-profile cyber attacks.

The US is a ‘cheap date’ in cyberspace. A commission has ideas to change that. (C4ISRNET) A top member of the Cyber Solarium Commission outlined a two-pronged approach for better cyber deterrence.

Solarium commissioners focus on cyber director, better attribution (FCW) Negotiations between the House and Senate on a $740 billion defense authorization bill will determine which recommendations from the Cyberspace Solarium Commission make it into law.

US announces visa restrictions for employees of Huawei and other Chinese tech companies (WGOW) Secretary of State Mike Pompeo on Wednesday announced visa restrictions on employees of Chinese technology companies, including Huawei, in the latest Trump administration move against Beijing.

Republican HEALS Would Rip and Replace Broadband (Benton Foundation) Not much broadband in GOP proposal

Sinotech: The U.S. and China Order Consulate Closures as Huawei Tensions Heat Up in Europe (Lawfare) Lawfare's biweekly roundup of U.S.-China technology policy and national security news.

Huawei-watching cyber security unit gets new chief (Capacity) The UK’s cyber security centre, which has played a leading part in examining the security of Huawei equipment in critical infrastructure, is to get a new head.

DHS official to be reassigned after intelligence collection on journalists (CNN) The Department of Homeland Security official who oversaw the intelligence division at the department is being reassigned after it was revealed his office had gathered intelligence reports on two US journalists, according to a source familiar with the matter.

Cuccinelli relaxed oversight of DHS intel office (POLITICO) The No. 2 official at the Department of Homeland Security greenlit a move to reduce the role of an internal civil liberties watchdog in intelligence reports.