ByteDance ‘would shut down’ TikTok in US rather than sell it
ByteDance would prefer to shut down TikTok than sell it if the Chinese company exhausts all legal options to fight legislation to ban it from app stores in the US, according to several sources.
The algorithms TikTok relies on are deemed core to ByteDance’s overall operations, which would make a sale of the app with algorithms highly unlikely, said sources close to its parent company.
Although TikTok is very popular, with more than 1 billion users, it still operates at a loss, accounting for a small share of ByteDance’s total revenues and daily active users. The parent company would rather close the app in the US in a worst-case scenario than sell it to a potential American buyer, they said.
A shutdown would have limited impact on ByteDance’s business, while the company would not have to give up its core algorithm, said the sources, who declined to be named as they were not authorised to speak to the media.
ByteDance said in a statement posted on Toutiao, a media platform it owns, that it had no plans to sell TikTok, in response to an article by the Information that claimed ByteDance
was exploring scenarios for selling TikTok’s US business without the algorithm that recommends videos to TikTok users.
In response to a request for comment, a TikTok spokesperson referred to ByteDance’s statement posted on Toutiao.
Shou Zi Chew, TikTok’s chief executive, said on Wednesday that the social media company expected to win a legal challenge to block legislation, signed into law by Joe Biden, that he said would ban its popular short video app, which is used by 170 million Americans.
The bill, which was passed overwhelmingly by the US Senate on Tuesday, is driven by widespread worries among lawmakers that China could access Americans’ data or use the app for surveillance.
The US president’s signing sets a 19 January deadline for a sale – one day before Biden’s term is scheduled to expire – but he could extend the deadline by three months if he determines ByteDance is making progress.