The future of TikTok hangs in the balance as legislation moves forward that could ultimately mandate a sale of the popular social media app. The House recently approved a bill that would require ByteDance, TikTok’s Chinese parent company, to sell the app to a buyer approved by the government in order to avoid a ban. However, the road to a potential divestiture is fraught with challenges.
Under the proposed legislation, ByteDance would have to arrange a sale that ensures TikTok is not under the control of a foreign adversary, such as China, within six months. The company would have to sever all ties with the app, including control over its algorithm, which tailors users’ video feeds to their interests. The president would also need to sign off on the sale to ensure it meets these conditions.
The question remains as to what exactly would be put up for sale. ByteDance could potentially sell off all of TikTok globally or try to separate its U.S. operations. However, the company would not be allowed to maintain any connection to TikTok moving forward, raising concerns about the feasibility of breaking off its U.S. business while still utilizing ByteDance’s algorithm.
The challenge of selling TikTok is further compounded by its estimated value of over $50 billion, making it too expensive for many potential buyers. Tech giants like Google or Microsoft could afford the app but may face antitrust concerns. Alternatively, a group of investors could band together to raise the necessary funds, or ByteDance could explore spinning off TikTok into a standalone public company.
Senator Mark Warner has suggested that a divestiture could involve a partnership between the U.S. and its allies, potentially including an American or European company. However, obstacles to a sale remain, including potential legal challenges from ByteDance and opposition from the Chinese government.
If ByteDance is ultimately forced to sell TikTok, it would mark a significant escalation in the digital cold war between the U.S. and China over control of critical technology. While similar forced sales have occurred in the past, the scale of TikTok’s operations and user base make this potential divestiture a major development in the ongoing battle for control of key digital platforms.
