The TikTok drama in the United States is just beginning. Recently, ByteDance denied reports suggesting it was considering selling the US version of the popular video app to prevent its potential blocking.
According to The Wall Street Journal, ByteDance addressed the issue through the digital newspaper Toutiao. Specifically, it responded to an article from The Information stating that the possibility of divesting from the social network was being considered, albeit under specific conditions.
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The aforementioned media outlet had reported that ByteDance was contemplating selling a majority stake in TikTok US, albeit without its recommendation algorithm. It also mentioned that there was a preference among Asians for the potential buyer to be a company not affiliated with the technology sector. However, the Chinese firm maintains that this information is false.
It’s clear that the controversy surrounding TikTok’s future in the United States is just beginning. ByteDance has already declared its intention to challenge the matter in the North American judicial system, arguing that the regulations recently enacted by Joe Biden, informally dubbed the “TikTok Law,” are unconstitutional.
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ByteDance Denies the Sale of TikTok in the United States
The 21st Century Peace through Strength Act, a legislative package that includes the Protecting Americans from Foreign Adversary Controlled Applications Act, mandates that ByteDance must sell TikTok and sever ties with China within 270 days. Failure to comply within this timeframe will result in the banning of the video app in the United States.
The regulations allow for a potential 90-day extension if progress is made towards completing the sale. However, the Chinese technology company intends to resist, even if all legal avenues to prevent the ban are exhausted.
Yesterday, Reuters reported that ByteDance would rather allow the TikTok ban to take effect than sell the app to a new American owner. Although the US constitutes TikTok’s largest international market, with 170 million monthly active users, it reportedly contributes a smaller share of revenue and daily active users compared to all ByteDance platforms. Consequently, a potential ban would have a “limited impact” on their overall business.
It’s important to note that the global version of TikTok is inaccessible in China. Instead, the platform operates through an app called Douyin, launched in 2016 and boasting over 750 million monthly active users. Other popular ByteDance products in China include Toutiao, which refuted The Information’s claims, and Xigua Video.
Several business figures have publicly expressed interest in acquiring TikTok in the United States. Notable individuals include Bobby Kotick, former leader of Activision Blizzard, and Kevin O’Leary from the TV show Shark Tank, alongside Steven Mnuchin, former US Treasury Secretary, who aims to assemble a group of investors for the acquisition. However, the final outcome remains uncertain, and as of today, the sale of TikTok seems increasingly improbable.