TikTok is gearing up for a legal battle against a U.S. law that would force the platform to sever ties with its China-based parent company, a move backed by Chinese authorities as tensions between the U.S. and China continue to escalate. Beijing has urged TikTok to fight what it calls a “robbers” act by U.S. lawmakers and avoid setting a bad precedent by surrendering to Washington. The Chinese government may not allow a sale of TikTok, as it could be seen as capitulating to the U.S., according to experts.
In response to the new law signed by U.S. President Joe Biden, ByteDance, TikTok’s parent company, stated that it has no plans to sell TikTok’s U.S. business. The legislation could potentially allow the U.S. government to target other China-related apps, leading to increased pressure on companies like TikTok and e-commerce platform Temu. With 170 million American users, TikTok has vowed to challenge the law, which requires ByteDance to divest its stakes within a year to avoid a ban.
The dispute over TikTok has intensified tensions between the U.S. and China, with both countries aiming to protect their economic and national security interests. Lawmakers in the U.S. are concerned about Chinese ownership of the app potentially allowing Beijing to exert unwanted influence, especially on young users. Washington has previously taken steps to curb the influence of Chinese companies, drawing protests from Beijing about economic coercion.
If a sale of TikTok’s U.S. business does occur, it is expected to be a challenging and complex process for the platform. The price tag for TikTok’s U.S. business is unknown but is likely to be high, limiting potential buyers. There are also uncertainties surrounding the fate of TikTok’s algorithm, which is a key component of the platform’s success. Chinese authorities may block the sale of the algorithm under revised export regulations, leading to potential challenges in rebuilding the technology in the U.S.
ByteDance would be prohibited from controlling the algorithm of a U.S. spinoff of TikTok, raising questions about the platform’s continuity and ability to reproduce the user experience. Some experts believe that replicating TikTok’s algorithm without access to the original technology could be challenging. Former Treasury Secretary Steve Mnuchin and others have suggested that TikTok would need to be rebuilt using new technology in the U.S. However, the feasibility and effectiveness of such a rebuild remain uncertain.
As the dispute between TikTok and the U.S. government continues, the future of the platform remains uncertain. If TikTok does not prevail in its legal challenge against the U.S. law, the company may need to consider alternative strategies. The Chinese government, led by President Xi Jinping, will play a crucial role in determining the outcome of the dispute, with discussions ongoing about potential next steps. Overall, the situation remains fluid, and the ultimate fate of TikTok in the U.S. is yet to be determined.
