TikTok: Better closure in the USA than sale - algorithm too important
ByteDance wants to avert the forced sale of TikTok in the USA in court. If this is not successful, the app will be closed rather than sold, it is said.
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ByteDance would rather close TikTok in the USA than sell the division if legal action against a new US law fails. This was reported by the news agency Reuters, citing several anonymous sources, and the announcement also fits in with statements made by ByteDance. According to these statements, the algorithm of the popular app is considered too central to the company's own business, which is why disclosure is "extremely unlikely". The US magazine The Information had previously reported that ByteDance was preparing to sell a majority stake in its US business to companies outside the tech industry if necessary. The algorithm would not be part of this takeover. ByteDance has now denied this.
Closure rather than sale
The reports about ByteDance's alleged plans follow the signing of a law by US President Joe Biden to force a change of ownership at TikTok. The Chinese group now has nine months to sell TikTok's US business to an approved buyer. Biden can extend the deadline by a further three months if he sees progress in the sales negotiations. Before this happens, however, ByteDance wants to go to court first. The attempt to stop the law in this way is considered to have a good chance of success. However, if this fails and ByteDance does not sell TikTok in the USA, the extremely popular app would be banned there.
As Reuters reports, citing sources, TikTok only accounts for a small part of ByteDance's business. A closure would therefore only have minor consequences, while the company could retain full control over the algorithm on which the recommendations on the video app are based. This is considered to be particularly good and is also a central component of ByteDance's apps, which are only available in China and account for a large part of the company's revenue. Authorities in China would also have to approve the sale of the algorithm, the news agency adds. In the USA, interested parties have reportedly already joined forces to take over the US business – including the algorithm.
(mho)