ByteDance would rather shut down US TikTok than sell it

AppleInsider

TikTok owner ByteDance reportedly will not sell to a US firm if it is unable to convince a court to overturn President Biden's day-old law forcing a sale or ban.

TikTok may be cease to be available in the US

According to the bill signed into law by President Biden on April 24, 2024, TikTok owner ByteDance must either sell the platform to a US firm, or face a ban. The company has nine months to comply, with a possible three-month extension if a deal is in progress.

According to Reuters, four unspecified sources say that ByteDance will not either sell TikTok or divest itself from the platform. The sources say that key to the issue is that selling the platform would require ByteDance to also sell the algorithms that power both TikTok and the company's other businesses.

The sources further said that TikTok as a whole represents only a small part of ByteDance's operations. Shutting the platform down in the US would have limited impact on ByteDance, and would mean that it retains its algorithms.

A separate source told Reuters that US users represented around a quarter of TikTok's global revenues in 2023. Two of the sources speaking to Reuters said that ByteDance revenue for 2023 was almost $120 billion, meaning TikTok earned at most $30 billion in that year.

Where a sale would mean giving another firm its proprietary algorithms, those algorithms also mean that ByteDance may not easily divest itself from the platform. The algorithms are reported registered as intellectual property of the company in China.

The sources also said that separating the firm's algorithms from TikTok would be complex. Neither ByteDance nor the Biden Administration have explained how TikTok would function as a global social media platform if it were broken up.

According to Reuters, former US Treasury Secretary Steven Mnuchin is reportedly considering forming an investor group to buy the company.

The US government's stance on TikTok is that as its owner ByteDance is a Chinese company, it could be compelled to provide data about American users of the platform. ByteDance has denied this, and says it intends to challenge the new law in court.



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zklausz

Remember this American companies next time you take your IP over to China and let them see it so they can make whatever it is cheaply.  They will NOT be doing the same. 

ronn

"President Biden's day-old law" has been in the works in one form or another since at least 2020 when President Trump's ill-conceived and implemented EO failed at banning TikTok. US intelligence agencies were concerned about the app since at least 2017 when The CCP implemented its National Intelligence Law compelling data-sharing with the government and imposing a gag-order on such mandated sharing.

robin huber

I guess American companies are not capable of creating a competitive platform offering the same features? Don’t wait for this brain dead time-waster to be forced out, get its domestic replacement out there now, then shame, induce, or appeal to the “patriotism” of TTers to migrate over. Hell, Trump could single handedly move his sheeple over in days. 

twolf2919

robin huber said:

I guess American companies are not capable of creating a competitive platform offering the same features? Don’t wait for this brain dead time-waster to be forced out, get its domestic replacement out there now, then shame, induce, or appeal to the “patriotism” of TTers to migrate over. Hell, Trump could single handedly move his sheeple over in days. 

The problem isn't the development of a competitive platform, but the 'network effect' of having a large audience.  Does anyone remember Google Hangouts?  In purely technical respects, it was far superior to Facebook.  But it never took off because people won't move to it since their 'friends' are not on it.   Chicken/egg problem.  Facebook now faces much the same problem with Threads - the X/Twitter competitor.   While more successful than Google's Hangout - probably because it leveraged its Snapchat and FB audiences - it still hasn't taken out X/Twitter.

blastdoor

Wow, shutting it down will really show those people who wanted it shut down a thing or two. 

Next thing you know, they'll threaten not to invade Taiwan. 

Anilu_777

America needs to out-compete China, not ban it like they did with Huawei and now with TikTok. They can call it what ever they want (national security or national whatever) but if US companies had a better product then Americans would use it. Sad image for the US. 

hammeroftruth

The success of it IMHO is that it gives anyone an easy way to say whatever they want to say. I remember hearing about it a long time ago when my sister in laws children had friends who were making these small videos and that’s when I was concerned about parents allowing children to post videos that anyone can see and not knowing what kind of protection they would have to be safe against predators. 

Now a lot more people are on it, and I choose not to download the app. 

Something else will take its place if they do shut down, but the cynic in me predicts a shill company with bought figureheads will end up buying it. 

avon b7

Anilu_777 said:

America needs to out-compete China, not ban it like they did with Huawei and now with TikTok. They can call it what ever they want (national security or national whatever) but if US companies had a better product then Americans would use it. Sad image for the US. 

I agree. Ban if you have good reason to ban. Show evidence and act accordingly. 

'Suspecting' this or that could happen and throwing everything under a 'national security' umbrella is doomed to failure. 

That failure itself would be OK if it only impacted the country taking the action. 

The problem is when you start demanding others follow suit (as the US does with its 'allies'). 

It won't work with places like China. Even now, Blinken is in China telling them what to do with their Russian interests - on their own soil. That is crazy.

Would US politicians accept someone from China landing in Washington and threatening action if they didn't get their way? 

Sadly, US interests (and with it, influence) are being impacted by foolhardy decisions of a few China hawks with influence. 

Non-US companies are wisely seeking to 'de-Americanise' for fear of being dumped onto some entity list, or worse, being required to stop doing business with someone simply because a small part of US technology is used in their equipment. All unilaterally. 

The best route from the get go was to out-compete/out-innovate rivals, not 'ban' them for reasons with zero supporting evidence. 

https://www.lawfaremedia.org/article/why-the-united-states-is-losing-the-tech-war-with-china

The Tik Tok situation is more paranoia than anything else. 

johnfrombeyond

Hmmmm, if a company would rather shut something down than sell it, that means there isn't any financial reason that TikTok exists today. A for-profit company would take the cash rather than lose everything. I wonder what value TikTok has to ByteDance and the Chinese government then? All that data on American citizens and a strong propaganda tool maybe?

Don't worry, once TikTok is gone, there will be plenty of US-grown alternatives that will thrive and take its place.

tophatnosocks

china blocks all kinds of Apps, why are we playing, just block it already, it's 100% trash.  All you complaining, I get it, you're addicted, wait until it's gone and see how much you get done when not wasting time on that crap.  

twolf2919

johnfrombeyond said:

Hmmmm, if a company would rather shut something down than sell it, that means there isn't any financial reason that TikTok exists today. A for-profit company would take the cash rather than lose everything. I wonder what value TikTok has to ByteDance and the Chinese government then? All that data on American citizens and a strong propaganda tool maybe?

Don't worry, once TikTok is gone, there will be plenty of US-grown alternatives that will thrive and take its place.

That's not the reason.  TikTok was created with intellectual property from the rest of BytDance at its core - i.e. proprietary algorithms.  To sell TikTok - which only makes 25% of BytDance's revenue - would mean giving away the IP that makes the rest of  ByteDance successful.  And the US only represents a small part of TikTok's global user base, so it's pretty clear that closing down shop in the US is financially preferable to giving away the goods of the whole company.

manfred zorn

The sources further said that TikTok as a whole represents only a small part of ByteDance's operations. Shutting the platform down in the US would have limited impact on ByteDance, and would mean that it retains its algorithms.

A separate source told Reuters that US users represented around a quarter of TikTok's global revenues in 2023. Two of the sources speaking to Reuters said that ByteDance revenue for 2023 was almost $120 billion, meaning TikTok earned at most $30 billion in that year.

How do you get from small part of ByteDance to a quarter of ByteDance revenue? Someone's math is not adding up.

blastdoor

Anilu_777 said:

America needs to out-compete China, not ban it like they did with Huawei and now with TikTok. They can call it what ever they want (national security or national whatever) but if US companies had a better product then Americans would use it. Sad image for the US. 

It absolutely is national security. If this were a Japanese company it wouldn’t be an issue at all. Nobody worries about Nintendo or Sony.

mike_galloway

manfred zorn said:

The sources further said that TikTok as a whole represents only a small part of ByteDance's operations. Shutting the platform down in the US would have limited impact on ByteDance, and would mean that it retains its algorithms.

A separate source told Reuters that US users represented around a quarter of TikTok's global revenues in 2023. Two of the sources speaking to Reuters said that ByteDance revenue for 2023 was almost $120 billion, meaning TikTok earned at most $30 billion in that year.

How do you get from small part of ByteDance to a quarter of ByteDance revenue? Someone's math is not adding up.

I think your confusing TikTok revenue with ByteDance revenue.

blastdoor

avon b7 said:

Anilu_777 said:

America needs to out-compete China, not ban it like they did with Huawei and now with TikTok. They can call it what ever they want (national security or national whatever) but if US companies had a better product then Americans would use it. Sad image for the US. 

I agree. Ban if you have good reason to ban. Show evidence and act accordingly. 

'Suspecting' this or that could happen and throwing everything under a 'national security' umbrella is doomed to failure. 

That failure itself would be OK if it only impacted the country taking the action. 

The problem is when you start demanding others follow suit (as the US does with its 'allies'). 

It won't work with places like China. Even now, Blinken is in China telling them what to do with their Russian interests - on their own soil. That is crazy.

Would US politicians accept someone from China landing in Washington and threatening action if they didn't get their way? 

Sadly, US interests (and with it, influence) are being impacted by foolhardy decisions of a few China hawks with influence. 

Non-US companies are wisely seeking to 'de-Americanise' for fear of being dumped onto some entity list, or worse, being required to stop doing business with someone simply because a small part of US technology is used in their equipment. All unilaterally. 

The best route from the get go was to out-compete/out-innovate rivals, not 'ban' them for reasons with zero supporting evidence. 

https://www.lawfaremedia.org/article/why-the-united-states-is-losing-the-tech-war-with-china

The Tik Tok situation is more paranoia than anything else. 

If you wrote this post in 2005 I’d have agreed with you. Now I view this post as hopelessly naive. Xi greenlit the Ukraine invasion, believing that his forever friend would win quickly, setting the stage for a Taiwan invasion. That’s not paranoia — it happened, and we have witnessed the worst horrors of war in Europe since the Nazis.

Ths CCP is a malignant force in the world. It must be contained. Being an apologist for them is a stain that you can’t wash out.

iadlib

Zàijiàn Tik Tok! One less thing to dumb down the next generation of american sceen addicts.

Appleish

Walk away from American cash? Doubtful.

cpsro

Maybe some state secrets the CCP doesn't want divulged.

StrangeDays

ronn said:

"President Biden's day-old law" has been in the works in one form or another since at least 2020 when President Trump's ill-conceived and implemented EO failed at banning TikTok. US intelligence agencies were concerned about the app since at least 2017 when The CCP implemented its National Intelligence Law compelling data-sharing with the government and imposing a gag-order on such mandated sharing.

And have used it — CCP used TikTok spied on pro-democracy protesters in Hong Kong:

https://www.cnn.com/2023/06/08/tech/tiktok-data-china/index.html

And Bytedance has already spied on US journalists: 

https://www.theguardian.com/technology/2022/dec/22/tiktok-bytedance-workers-fired-data-access-journalists

…China cannot be trusted and it’s foolish to not block their spy tools. 

StrangeDays

Anilu_777 said:

America needs to out-compete China, not ban it like they did with Huawei and now with TikTok. They can call it what ever they want (national security or national whatever) but if US companies had a better product then Americans would use it. Sad image for the US. 

This has zilch to do with “better products”, and everything to do with spyware that’s already being abused by the CCP. 

The competition argument is hilarious, because the CCP has already banned all the US-based social media apps. Oops!