TikTok To Be Shut Down Rather Than Sell It To US Owners, Reuters Report - 5 Key Points

In a defiant move against US legislation that gives ByteDance nine months to divest TikTok, with a 90-day extension available to complete a deal, the company stands firm, preferring to shut the app in US rather than succumb to pressure to sell it if legal avenues fail, news agency Reuters reported quoting four sources close to the company. The sources reveal ByteDance”s reluctance to part with TikTok, citing the app”s core algorithms as integral to its operations. Earlier in the day on Thursday, in an official statement posted on Toutiao, a media platform owned by the Chinese firm ByteDance, the company said it has no plan to sell TikTok and it is exploring scenarios for selling TikTok”s US business without the algorithm that recommends videos to TikTok users.

TikTok, a video-sharing mobile application owned by the Chinese company ByteDance Ltd., has reportedly been downloaded over 175 million times in the United States and over one billion times globally.

Here are key points on this development:

1. ByteDance favors shutting down TikTok over a sale if legal battles to fight the US ban exhaust. The app”s algorithms, vital to ByteDance”s operations, render a sale improbable. Despite TikTok”s modest contribution to ByteDance”s revenues and user base, the parent company prioritizes protecting its core algorithm.
2. A shutdown would minimally impact ByteDance”s business while safeguarding its algorithm. ByteDance”s official statement denies any intention to sell TikTok. Reports suggest ByteDance is exploring selling TikTok”s US business without its algorithm.
3. President Biden”s signing of the bill mandates ByteDance to divest TikTok within nine months to a year. This legislation aligns the US with other nations, including India, Australia, and the UK, in taking action against TikTok.
4. CEO Shou Zi Chew, a Singaporean businessman, criticized the newly passed US law, calling it a restriction on TikTok and freedom of expression.
5. As per an executive order passed by President Donald Trump in August 2020, TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories.  “This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.,” the order had said then.