26-4-2024 (BEIJING) ByteDance, the Chinese tech powerhouse behind TikTok, has rebuffed any plans to sell the viral video platform following new US legislation that places it under pressure to divest or face a ban in the United States.
US lawmakers have mandated a nine-month deadline for ByteDance to sever ties with TikTok, citing national security concerns over potential espionage and propaganda ties to the Chinese government while under ByteDance ownership.
Speculation arose after reports from The Information, a tech-focused US news outlet, suggested ByteDance was exploring scenarios for TikTok’s sale, potentially without its pivotal recommendation algorithm, which drives engagement among its vast user base of over one billion globally.
However, ByteDance swiftly quashed these rumours, affirming its stance against any divestment plans. “Foreign media reports about ByteDance exploring the sale of TikTok are untrue,” the company stated on its Chinese-language platform Toutiao. “ByteDance does not have any plans to sell TikTok.”
TikTok has long been embroiled in political controversies, initially becoming a target during the Trump administration’s tenure, which attempted unsuccessfully to prohibit its operations in the US. Despite vehemently denying any association with the Chinese government, TikTok has faced persistent scrutiny over data privacy concerns.
In response, TikTok has pledged approximately $1.5 billion towards “Project Texas,” aimed at housing US user data within American borders. Nevertheless, critics argue that the crux of the issue lies not only in data storage but also in the detachment of TikTok’s recommendation algorithm from ByteDance.
TikTok’s CEO, Shou Zi Chew, has vowed to challenge the new legislation in court. However, legal experts suggest that national security considerations could overshadow free speech protections in the US Supreme Court.
The potential sale of TikTok, valued in the tens of billions, poses considerable challenges, particularly as US tech giants like Meta (formerly Facebook) and Google could face regulatory hurdles in acquiring the platform. Moreover, TikTok’s algorithm, considered its crown jewel, is a critical asset that any sale would likely hinge upon.
Yet, any transfer of such technology from a Chinese entity requires Beijing’s approval, complicating matters further. China has firmly opposed any enforced divestment, pledging to safeguard the interests of its companies against external pressures.
