TikTok Owner Would Rather Shut Down Than Sell
TikTok owner ByteDance has made it clear that it has no plans to sell its video-sharing platform.
The Chinese company would rather shut down in the United States than sell its app to another company or investment group should it lose its ongoing legal battle. According to an exclusive story by Reuters, legislators are trying to impose a nationwide ban on TikTok
In a statement shared on Toutiao, another media platform owned by the company, ByteDance clarified that reports of it “exploring the sale of TikTok are untrue.”
This update comes two days after President Joe Biden signed a law banning TikTok unless the Chinese-based company divests the app by January 19, 2025. However, the platform could get a 3-month extension if the government sees that a deal is in progress. The controversial legislation was passed with a huge margin of 79 in favor of it and 18 against.
The bill had already been ratified by the U.S. House days earlier. It was signed off amid long-held bipartisan concerns that its current ownership structure raises national security and surveillance concerns.
In response, ByteDance declared it would rather “continue to challenge this unconstitutional ban.”
“We aren’t going anywhere,” CEO Shou Zi Chew said in a video posted last week.
He elaborated, “We are confident and we will keep fighting for your rights in the courts. The facts and the Constitution are on our side, and we expect to prevail again.”.
The company will try to block legislation that prevents the popular short video app from being used by more than 170 million Americans. However, if push comes to shove, they seem to be willing to exit the market.
According to the company, the US only accounts for 5% of its daily active users. However, it did contribute around a quarter of its global revenues in 2023, so many believe it would significantly affect ByteDance’s bottom line.
Despite speculations, four unspecified sources told Reuters that shutting down US users’ access would have a “limited impact” on ByteDance. The company generates about 90% of its revenue from China. Most of it comes from advertising and live broadcasting on Douyin, the Chinese counterpart of TikTok.
It will still have its proprietary technology which allows TikTok to use a hyper-responsive recommendation system to tailor the “For You” page to users. This algorithm is responsible for giving it an edge over its largest competitors like Tencent and Xiaohongshu.
In the face of restrictive US legislation, “China will firmly oppose it (the forced sale of TikTok),” said a spokesperson during a congressional hearing.
ByteDance shares the TikTok algorithm with its domestic businesses and deems it a central component in its overall operations. Selling the business while retaining the rest of the operations will “break” the app CEO Chew said.
A sale is thus highly unlikely as the TikTok owner remains committed to protecting and maintaining control over its cutting-edge proprietary programming.
The app is currently banned from government-issued federal devices and systems in over 30 states in the US. Many other countries have also banned TikTok amid questions regarding privacy and security. This includes India which previously promised the internet company a user base of approximately 200 million.
