Apple May Bear the Wrath of China If Microsoft Buys TikTok

In an unusual and arguably unfair twist, there’s a good chance that Apple may get caught in the crossfire between China and the U.S. if President Donald Trump’s plans to have Microsoft purchase TikTok’s global operations come to fruition.

Following a roller-coaster ride for the controversial video-sharing social media network in the U.S. over the past few months, President Trump finally threatened to ban the service outright in the U.S. by September 15th if the platform didn’t come under the control of a U.S. company.

In what seems like the result of a backroom deal with the Trump Administration, Microsoft was quick to step up to the table and offer to acquire the service in order to keep it operating in the U.S.

Unfortunately, this whole situation is not sitting well at all with the Chinese government, which is saying that it considers such a move “theft” of TikTok by the U.S., and threatening to retaliate in some way if the deal goes through.

According to Reuters, an editorial in the government-backed China Daily newspaper said that the deal amounts to “bullying” of Chinese tech companies by the U.S., and will leave China with no choice but “mortal combat in the tech realm,” adding that China has “plenty of ways to respond if the administration carries out its planned smash and grab.”

Although it still called the move “open robbery” and castigated the Trump administration, another major state-backed paper, The Global Times, offered a slightly less aggressive commentary on what China’s response should be, adding that China’s ability to protect its interest in Chinese companies is “limited” as it’s difficult to retaliate against U.S. companies that have such technological superiority, as well as influence with China’s allies.

Instead, The Global Times notes that “opening-up to the outside world and disintegrating the U.S. decoupling strategy” should be China’s main priorities in dealing with this issue.

Many Chinese citizens are similarly incensed by the Trump Administration’s move, and according to the Wall Street Journal are suggesting that the Chinese government should retaliate against the U.S. by ordering Apple’s China-based operations to be sold to Huawei.

Apple Has a Target on Its Back

While that may seem far-fetched, especially since it’s mostly commentary from the peanut gallery, some retaliation against Apple is actually much more likely than you might expect.

As John Gruber points out at Daring Fireball, Apple is the only major U.S. tech company with a strong presence in China, and it also has a huge profile among Chinese consumers, so if China is going to retaliate by making an example of any U.S. company, Apple makes a very appealing target.

By contrast, Facebook and Google are completely banned in China, so they basically have no presence there whatsoever, and while Microsoft would seem to be a more obvious target, they’re simply not as visible in China as Apple is.

Comment

Microsoft would be the obvious tit-for-tat target. But does Microsoft have a neatly bundled consumer presence in China?

John Gruber, Daring Fireball

In fact, China has already been contemplating the idea of retaliation against Apple in response to the U.S. ban on Huawei, with Reuters reporting back in May that the Chinese government was preparing to put several U.S. companies, including Apple, on an “unreliable entity list,” which could result in a number of restrictions being imposed on Apple and other U.S. companies, including unspecified legal and administrative measures and “discouraging” Chinese citizens from dealing with those companies, which would almost certainly have a negative impact on iPhone sales in China.