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ByteDance, TikTok‘s parent company, would choose to close its US operations rather than sell, should it lose its fight against the call to ban the app in the country, Reuters reported, citing sources.
The shared algorithms between TikTok and ByteDance could make selling the app difficult, as their intellectual property is currently registered in China, the people added.
If ByteDance chooses to exit the US, its overall business will be minimally impacted, as TikTok accounts for a small part of the Chinese company’s total revenue and user base, the report noted. It would also enable the company to keep its key algorithm.
Even though TikTok is popular worldwide, it made up only 25% of ByteDance’s total earnings in 2023. Additionally, the short-video app’s daily active users in the US only accounted for 5% of ByteDance’s daily active users globally for that year.
While the US is pressuring ByteDance to sell TikTok due to privacy concerns, Chinese officials suggested in a 2023 hearing that a forced sale would meet opposition from China. The country’s laws, which require following administrative procedures for tech exports – which TikTok’s algorithm would fall under – could also slow down the platform’s sale.
See also: Singapore Court dismisses bid by former CTO to liquidate Cake Group
Editing by Putra Muskita and Lorenzo Kyle Subido
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