The Senate passed a bill on Tuesday that would require the sale of TikTok by its Chinese owner, ByteDance, or face an outright ban. The bill, citing national security concerns due to TikTok’s Chinese ties, is expected to be signed into law quickly by President Biden.
However, the process is expected to become even more complicated. Legal challenges and potential resistance from Beijing could hinder the sale of TikTok. The proposed law allows TikTok to continue operating in the U.S. if ByteDance sells it within 270 days, with the possibility of an extension to a year.
TikTok is likely to challenge the measure in court, arguing that a forced sale could violate users’ free speech rights. The American Civil Liberties Union may also join the legal fight against the bill.
The price tag for TikTok is estimated to be in the tens of billions of dollars, limiting potential buyers. Tech giants like Meta or Google may be blocked from acquiring TikTok due to antitrust concerns. Private equity firms or investors could form a group to raise funds for the purchase.
The process of separating TikTok from ByteDance is expected to be messy, as the legislation prohibits any connection between the two entities post-sale. The uncertainty around the export of ByteDance technology, including the app’s recommendation algorithm, could deter potential buyers.
China’s role in the sale of TikTok remains unpredictable, as Chinese officials have criticized similar bills in the past. Beijing’s export regulations could give them a say in whether ByteDance can sell or license TikTok’s valuable features. China may retaliate against American companies, as seen with their recent demand for Apple to remove Meta’s WhatsApp and Threads from its App Store.
Overall, the future of TikTok’s ownership and operation in the U.S. is uncertain, with legal challenges, potential resistance from Beijing, and the complicated process of divestment all playing a role in the outcome.
