TikTok's parent company considers shutting down app over U.S. sale mandate

ByteDance may opt to discontinue TikTok rather than sell it to an American firm, sources say

TikTok's parent company considers shutting down app over U.S. sale mandate
AP Photo/Mariam Zuhaib
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ByteDance, the Chinese company that owns the popular social media platform TikTok, is reportedly considering shutting down the app entirely in the United States rather than selling it to a domestic buyer, according to sources familiar with the matter.

The potential decision comes after President Biden recently signed into law a bill that bans TikTok unless it is sold by ByteDance within a year. Under the new legislation, the company has until January 2024 to divest TikTok, failing which web services in the U.S. will be prohibited from enabling the app, and major tech companies like Google and Apple will be required to remove it from their app stores, the Post Millennial reports.

While TikTok contributes only a small portion to ByteDance's overall revenue, the company is reportedly unwilling to sell the app's core algorithm, which underpins its operations, to an American firm, sources told Reuters. ByteDance is instead pinning its hopes on a legal challenge to block the divestment mandate, with TikTok CEO Zi Chew asserting the company expects to "prevail again" in court.

"Rest assured, we aren't going anywhere," Chew said in a TikTok video after Biden signed the bill. "The facts and the Constitution are on our side, and we expect to prevail again. While we make our case in court, you'll still be able to enjoy TikTok like you always have."

The bipartisan legislation aims to address national security concerns over TikTok's data collection practices and its Chinese ownership. With around 170 million American users, TikTok generated roughly 25% of its global revenue from the U.S. market last year.

ByteDance has until January 19, 2025 – a day before Biden's current term ends – to sell TikTok, though the deadline can be extended by three months if progress is being made.

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  • By David Menzies

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