Why selling TikTok is almost impossible, despite pressure from the US

A law that prohibits TIK Tak In the United States, if they don’t cut ties with ByteDance, and therefore with China, they already have half the sanctions. The House approved it yesterday by a vote of 362 to 65, and its consideration now moves to the Senate, where a much closer vote is expected. They do not hide their anger from social networks, but are glad that the scales in the Upper House are tipping in their favor. They know that otherwise Joe Biden will sign the law into law.

The TikTok Act, whose official name is the Protecting Americans from Apps Controlled by Foreign Adversaries Act, will force ByteDance sell the American version of the social network within 180 days after its publication. If this is not done, the application will be blocked.

As we have commented in previous days, TikTok is planning a strategy aimed at challenging the legality of the rules. The platform will invoke the First Amendment of the US Constitution, arguing that a forced sale would constitute a violation of freedom of expression, it said. Wall Street Magazine recently.

Analysts say the law is not really aimed at blocking TikTok, but at selling it to a local company to sever its ties to China. With 170 million users in the US alone who already understand the importance of reaching young audiences in an already hot election year, both Democrats and Republicans understand the platform is a much-needed way to reach a key core of potential voters. .

He crux of the matter The thing is Selling on TikTok today is almost impossible to achieve.. Not only because ByteDance refuses to do this, but also because China will not allow it. And in the highest political circles of the United States, it seems that they are downplaying the role of the Asian giant’s regulators in this story.

TikTok sale requires Chinese approval

ByteDance, the parent company of TikTok, is a company founded and based in China, although it is registered in the Cayman Islands. Sale or merger of the company or any of its subsidiaries, must receive Chinese regulatory approval. And given the current situation, it is logical to assume that this approval will never be received.

It is worth noting that TikTok has four main divisions that are responsible for conducting business in different parts of the world. They are in Singapore, Australia, UK and USA. If the law forces ByteDance to sell the US portion of TikTok, it cannot happen without China’s prior consent.

“The problem is that the Chinese government is unlikely to approve such forced mergers and acquisitions. Any type of purchase or divestiture and merger with another company must be approved by the Chinese government, which will likely reject it. And so it is. ByteDance is probably already warning that it won’t allow this to happen,” said analyst Paul Triolo. CNBC.

But the matter is not limited only to business: the most conflicting element is technological. We are, of course, talking about the TikTok algorithm.. Richard Windsor Radio free mobilerecently said China would not allow the technology to fall into foreign hands as it was developed in its country and is critical to its national security.

Here’s how the analyst explained it:

“TikTok is a popular app because the algorithm created by ByteDance is the best in the world at identifying the characteristics of videos and then matching those characteristics with users who will be interested in watching them.

This algorithm is China’s own technology, and the Chinese state has repeatedly stated that it considers such technology important to its national security. Therefore, he will not allow Chinese technology of this kind to leave its shores or end up in the hands of countries that he considers hostile.

“This makes severing ties between ByteDance and TikTok USA very problematic because TikTok USA needs an algorithm to function, but doing so would be contrary to the wishes of the Chinese government and the laws it has enacted.”

Richard Windsor

China accuses US of bullying

After the semi-sanction of the “TikTok law” in the United States, China did not remain silent. The Asian giant’s Foreign Ministry accused the Americans of “state power sentiment” against ByteDance. At the same time, the representative claimed that Congress and the White House were trying to intimidate.

“If excellent foreign companies can be arbitrarily suppressed under the pretext of national security, then there can be no question of fairness and justice. Everyone can clearly see that this is bullying behavior and amounts to the logic of theft,” they said from Beijing. , as reported NBCNews.

While darts are being traded between Asia and North America, some interested parties have begun to move their chips to buy TikTok. If its sale is approved, of course. A few days ago name Bobby Kotickthe former CEO of Activision Blizzard, who has already reached out to other heavyweights in the tech sector to accompany him, including OpenAI’s Sam Altman.

In the last hours a second potential candidate has joined: Steven Mnuchin, former US Treasury Secretary. The aforementioned assured that he would form a group of investors to acquire the social network.

“The law should be passed and I think it should be sold. This is a big business and I’m going to start a group to buy TikTok. It must be owned by American companies. There is no way the Chinese will allow an American company to have something like this in China,” he said.

A novel about the future of TikTok in the US He hasn’t written his last chapter yet.. For now, all eyes are on what will happen to the Senate vote on the legislation. Strong news is expected in the coming weeks.