ByteDance, the parent company of TikTok, is facing a complex situation in the United States. It’s rumored that they’d rather shut down the immensely popular video-sharing app than sell it if their legal efforts to challenge the law banning TikTok in the US fail.
According to four sources familiar with the matter speaking to Reuters, ByteDance, based in China, is leaning towards taking drastic steps to block US users’ access to TikTok rather than selling the platform to another company or investor before the deadline set for January 19, 2025. This decision comes as ByteDance officially confirms that they have no intention to sell TikTok, as announced through their other platform, Toutiao.
“Reports from international media about the possible sale of TikTok by ByteDance are untrue,” ByteDance stated that ” We have no intention to sell TikTok.”
President Joe Biden recently signed a law banning TikTok on April 24, 2024, largely due to concerns about potential Chinese access to US user data and the potential misuse of TikTok for surveillance purposes. Nevertheless, ByteDance insists that they will continue to fight what they call an unconstitutional ban.
One source familiar with the situation explained to Reuters that TikTok’s algorithm is a highly valuable asset for ByteDance’s overall operations, making selling it unlikely. Although TikTok contributes only a small portion of the company’s total revenue and daily active users, the impact of its closure is considered limited for ByteDance as a whole.
While the US accounts for only 5% of ByteDance’s total daily active users, the country still contributes about 25% of TikTok’s revenue in 2023, according to Reuters sources. They also emphasize that ByteDance’s main assets, besides TikTok’s algorithm, are user data, as well as product operations and management.
The law banning TikTok is the furthest step the US has taken in its long and complex relationship with the app. Some states, like Montana, have passed laws explicitly banning TikTok use, but these decisions are still in litigation and have not become law.
On the other hand, TikTok has already been banned on smartphones issued by the US federal government, and over 30 states, including Alabama, Illinois, and Pennsylvania, have also banned its use on government devices.
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