With around 9 months left before ByteDance will be banned in the US, the owner of social media platform TikTok would rather face the ban in the US than selling the app to another company according to a report by Reuters.
Reuters’ sources explained ByteDance’s stance, stating that TikTok’s algorithms are core to their operations. Another reason for this is that TikTok only accounts for a small share of ByteDance’s total revenues and daily active users–a ban in the US will have limited impact to ByteDance’s business.
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The algorithm that TikTok uses is part of ByteDance’s intellectual property license in China, which also explains why ByteDance refuses to sell TikTok’s US business to other companies, according to Reuters’ sources. In addition, ByeDance’s algorithm is considered its “secret source”, being better than what rivals like Tencent and Xiaohongshu have to offer.
Because of those factors, selling TikTok’s US business would be a complicated procedure that ByteDance would not like to consider. “China will firmly oppose it (the forced sale of TikTok),” a spokeswoman from the Ministry of Commerce said at a news conference in Beijing last March 2023. “The sale or divestiture of TikTok involves technology export and must go through administrative licensing procedures in accordance with Chinese laws and regulations.”
While ByteDance declined to comment regarding the issue, it did post a statement on Toutiao last Thursday (April 25) that it is exploring other options on possibly selling TikTok’s US business without including the algorithm that recommends videos to its users. Toutiao is a platform that ByteDance owns and operates in China.
