TikTok’s parent company would rather shut down platform than sell to a US company: report

May 5, 2024 | Political News

ByteDance, the parent company of the social media app TikTok, has indicated that the company may prefer to shut down the app entirely rather than sell it to a US-based company. 

The news comes in the wake of President Biden signing into law a ban on TikTok unless it is sold within a year. Under the new legislation, ByteDance has until next January to sell TikTok to another company. 

If Bytedance fails to sell TikTok, web-hosting services in the US will be prohibited from supporting the social media platform, and tech giants like Google and Apple will be required to remove the app from their app stores.

Despite TikTok being only a small portion of ByteDance's overall revenue, the company appears unwilling to sell the app to an American company, according to sources that spoke with Reuters

The company is reportedly hesitant to hand over its core algorithm used on the platform, which it heavily relies on for its overall operations. 

TikTok CEO Zi Chew has stated that the company instead expects to win a legal challenge that would block the legislation from taking effect.

“Rest assured, we aren’t going anywhere,” Chew said in a TikTok video after the Senate passed the bill and Biden signed it into law. “The facts and the Constitution are on our side, and we expect to prevail again.

“While we make our case in court, you’ll still be able to enjoy TikTok like you always have,” he added. 

The bipartisan legislation is intended to address national security concerns related to TikTok's data collection practices and the company’s ties to the Chinese government. 

Approximately 170 million Americans use TikTok, and the US accounted for about 25% of TikTok’s overall revenue last year.

ByteDance has until January 19 to sell the application, the day before Biden’s term as President ends. However, the deadline can be extended by three months if the company proves it is making progress to sell the social media platform.