ByteDance would rather leave the US than be forced to divest TikTok. The social media giant wants to first challenge the legislation in court.
ByteDance made it clear last week that it has no plans to sell TikTok. TikTok CEO Shou Zi Chew already announced via the platform that he would contest the new American legislation. This legislation requires TikTok to be sold within nine months. The American president can then extend that period once more by three months. If ByteDance still clings to the platform, a ban will follow and TikTok must leave the US.
Although such a ban is not yet on the agenda, ByteDance appears to see a departure from the US as a realistic option, Reuters news agency reports.
No sales to Americans
Reuters sources reiterate that ByteDance has no plans to sell its social media platform to a US company. The company is pinning its hopes on the lawsuits it will pursue in the US to have the ban lifted. If it is not possible to get out of the ban, TikTok may leave the US.
Algorithm and revenue
ByteDance’s resistance to sales largely has to do with the technology that keeps the platform running: its algorithms. The social media giant also uses the same algorithms for other social media platforms operating in China. These algorithms determine the success of TikTok and ByteDance’s other services. In the event of a sale, ByteDance would lose control of the software, with all the consequences that entails.
Moreover, the financial impact of a departure from the US would only be “limited”, several sources told Reuters. Although TikTok has 170 million U.S. users, its revenues are relatively modest. That lost revenue may not outweigh losing control of the crucial algorithm.
Uncertainty about the future
For the time being, it remains to be seen how exactly the legislation will work out. It is expected that the ban will be postponed in any case if the lawsuits are still pending. Depending on the strategy ByteDance chooses, that process could take several years.
The question is also whether American judges will simply go along with the legislation. A similar ban was previously lifted in the US state of Montana. The judge was of the opinion that the ban would restrict freedom of information and speech too much.
