ByteDance, the parent company for TikTok, would prefer shutting down the platform in the United States rather than sell it if all of its legal options are exhausted and the legislation passed to ban it still stands, according to a report.
Want to get caught up on what's happening in SoCal every weekday afternoon? Click to follow The L.A. Local wherever you get podcasts.
The report of ByteDance’s intentions for TikTok comes from Reuters, which cited four sources familiar with the matter.
Congress recently passed legislation that will force ByteDance to sell TikTok or otherwise see it banned in the US over fears of foreign manipulation on the platform. President Biden signed the legislation this week, starting the clock on when TikTok will be shut down domestically.
“This unconstitutional law is a TikTok ban, and we will challenge it in court,” TikTok said in a statement after Biden signed the bill.
Still, ByteDance is not likely to sell the platform, mainly because of TikTok’s algorithms, which the company values highly, a source told Reuters.
Because TikTok accounts for a small portion of the total revenues and daily active users that ByteDance has, the sources said it would rather shut the app down in the US in the worst-case scenario.
The sources added that if it was forced to shut down the app in the US, it would see a limited impact on the parent company’s business.
Last year, Reuters reported that the US accounted for around 25% of TikTok’s overall revenues.
On the other hand, the sources said the impact would be far greater if it had to give up its core algorithm by selling TikTok to an American buyer.
In 2023, ByteDance made nearly $120 billion in revenue, up from 2022’s figure of $80 billion, Reuters reported.
ByteDance seemed to confirm this in a statement posted on Toutiao, another platform it owns, saying there were no current plans to sell TikTok.
Now, the clock is ticking, as ByteDance will need to decide by Jan. 19, 2025, or otherwise see the platform blocked in the US.
Follow KNX News 97.1 FM
Twitter | Facebook | Instagram | TikTok