The future of TikTok is in a critical situation, with a real risk of facing a ban in the United States if it doesn’t change ownership. Here we explore possible solutions to resolve this conflict.
The approval of a law in the United States threatening to ban TikTok if it doesn’t sever ties with ByteDance, its parent company in China, has marked a milestone. President Joe Biden has signed the 21st Century Peace through Strength Act, which includes the Protecting Americans from Foreign Adversary Controlled Applications Act, known as the “TikTok Law.”
This legislation grants ByteDance, the parent company, a 270-day deadline to sell the U.S. version of TikTok and thus avoid its blocking in the country. TikTok’s reaction has been one of indignation, promising legal action as it considers the law unconstitutional.
However, beyond the legal aspects, the sale of TikTok faces significant obstacles. ByteDance, based in China, requires approval from Chinese regulators for any merger or sale of the company or its subsidiaries, posing a significant challenge.
The technological element is also crucial: TikTok’s algorithm, developed in China, is considered vital for Chinese national security, further complicating any sale negotiations involving this component.
Tensions between China and the United States over TikTok have been evident, with accusations from both sides. China has criticized U.S. intervention as an abuse of state power, while the United States argues the need to protect national security.
In this context, ByteDance and TikTok’s options are limited and complex. Although the company has expressed its intention to challenge the law as unconstitutional, other possibilities are also being considered.
One option is to wait for a change of government in the United States, hoping a new administration could reverse the decision. Another alternative is to consider selling TikTok, albeit without including its algorithm, a condition that would complicate negotiations and significantly reduce its value.
Potential buyers include prominent figures like Bobby Kotick, former CEO of Activision Blizzard, and Kevin O’Leary, a well-known billionaire. However, allowing the ban to take effect, albeit unwanted, is also a possibility for ByteDance.
The outcome of this situation remains uncertain, but what is certain is that the conflict between TikTok and the United States will continue to be a relevant issue in the technological and geopolitical spheres.
By: Nestor Castillo, ForAllTechNews Director