TikTok may be cease to be available in the US
TikTok owner ByteDance reportedly will not sell to a US firm if it is unable to convince a court to overturn President Biden's day-old law forcing a sale or ban.
According to the bill signed into law by President Biden on April 24, 2024, TikTok owner ByteDance must either sell the platform to a US firm, or face a ban. The company has nine months to comply, with a possible three-month extension if a deal is in progress.
According to Reuters, four unspecified sources say that ByteDance will not either sell TikTok or divest itself from the platform. The sources say that key to the issue is that selling the platform would require ByteDance to also sell the algorithms that power both TikTok and the company's other businesses.
The sources further said that TikTok as a whole represents only a small part of ByteDance's operations. Shutting the platform down in the US would have limited impact on ByteDance, and would mean that it retains its algorithms.
A separate source told Reuters that US users represented around a quarter of TikTok's global revenues in 2023. Two of the sources speaking to Reuters said that ByteDance revenue for 2023 was almost $120 billion, meaning TikTok earned at most $30 billion in that year.
Where a sale would mean giving another firm its proprietary algorithms, those algorithms also mean that ByteDance may not easily divest itself from the platform. The algorithms are reported registered as intellectual property of the company in China.
The sources also said that separating the firm's algorithms from TikTok would be complex. Neither ByteDance nor the Biden Administration have explained how TikTok would function as a global social media platform if it were broken up.
According to Reuters, former US Treasury Secretary Steven Mnuchin is reportedly considering forming an investor group to buy the company.
The US government's stance on TikTok is that as its owner ByteDance is a Chinese company, it could be compelled to provide data about American users of the platform. ByteDance has denied this, and says it intends to challenge the new law in court.