ByteDance, the Chinese company behind TikTok, is reportedly considering shutting down the app in the United States rather than selling it, as revealed by Reuters, citing four sources. This move comes amidst legal battles triggered by legislation aimed at banning the platform from American app stores.
Sources familiar with the situation suggest that TikTok is unlikely to be sold along with its crucial algorithms, which are integral to ByteDance’s operations. This decision follows US President Joe Biden’s recent enactment of a bill seeking to prohibit the social media app in the country.
The legislation, previously endorsed by the US Congress, mandated ByteDance to sell the app within nine months or face a US ban. Concerns over potential data sharing with the Chinese government have fueled the push for the ban, although TikTok denies such allegations.
Despite TikTok constituting a small fraction of ByteDance’s revenue and user base, the parent company reportedly prefers a US app shutdown over a sale to an American buyer. Sources, speaking on condition of anonymity, reveal that ByteDance’s core algorithm would remain accessible even if the app shuts down, with minimal impact on revenue.
ByteDance declined to comment on the matter, but in a statement on Toutiao, it clarified that there are no plans to sell TikTok. This statement contradicts earlier reports suggesting ByteDance is exploring options to sell TikTok’s US business without its vital algorithm.
Meanwhile, TikTok’s CEO remains optimistic about overcoming legal challenges. The app currently boasts 170 million American users, contributing approximately 25% of its total revenues last year.
The TikTok algorithm, considered a trade secret, is central to the platform’s success. ByteDance is reportedly reluctant to part with it in any potential sale, as it plays a crucial role in curating content for users’ personalized feeds. However, critics in the US view the algorithm as a national security risk, fearing it could enable espionage by third parties in China.
- Tags: Algorithm, ByteDance, LegalBattle, TikTok, USBan
