TikTok’s Chinese parent company rules out selling it, despite the US ultimatum

The company China matrix TikTokByteDance, said it had no intention of selling the popular social network after the approval of a law in Congress USA that threatens to ban it if it does not cut its ties with the Asian power.

US lawmakers set a nine-month limit on the sale of the platform, alleging that it can be used by the Chinese government for espionage and propaganda purposes.

The specialized website The Information published that ByteDance was studying the scenario to sell TikTok without the powerful and secret algorithm that recommends its videos to the more than one billion users in the world. But the Chinese technology giant denied it.

“Reports from foreign media about ByteDance exploring the sale of TikTok are not true”the company stated Thursday night on its Toutiao account, a social network of the group.

“ByteDance has no plans to sell TikTok”he added.

This popular platform has been a source of political and diplomatic controversy for years. Previous US President Donald Trump already tried to ban it without success.

The company has repeatedly denied any ties to the Chinese government and has assured that it has never and will never share private data of American users with Beijing.

It has also highlighted its investment of around US$1.5 billion in “Project Texas”, so that the data of American users is stored within the country.

But critics say data is only part of the problem and demand that the algorithm (the secret to its success) also be separated from ByteDance.

The CEO of the platform, Shou Zi Chew, announced that the company will take the law to court, but some analysts believe that national security reasons may weigh more before the Supreme Court than freedom of expression.

Complicated operation

A forced sale of the platform, whose value is estimated at billions of dollars, would present major complications.

Companies with sufficient resources to face it, such as the American technology giants Meta or Google, would probably not be able to do so due to competition and antitrust rules.

For many investors, TikTok’s most valuable feature is the video recommendation algorithm.

But their sale needs to be approved by Beijing, which declared these algorithms protected technology after Trump’s attempt to ban TikTok in 2020.

Until now, Chinese authorities have been firmly against a forced sale of the platform and have warned that they will take all necessary measures to protect their companies.

Although TikTok has become a global phenomenon, it only accounts for a small portion of ByteDance’s revenue, according to analysts and investors.

The group has experienced explosive growth in recent years and has become one of the most valuable companies in the world.

Its international investors, which include American firms such as General Atlantic and SIG and Japan’s SoftBank, have deposited billions of dollars in it.

“TikTok US is a very small part of the global business. “It’s an exciting part of the story, sure, but (…) in relation to the overall size, it’s a very small part,” an investor in the group, Mitchell Green of the American Lead Edge Capital, told CNBC. “If they expel her from USAwe will not sell”he claimed.

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