TikTok will have to sell its US business and sever all ties to China if it doesn’t want to be blocked by the US. According to reports, this was a warning the White House recently issued against ByteDance, the parent company of the popular video app. Wall Street Magazine.
The above-mentioned media outlets indicate that the Chinese company’s ultimatum was reported through the Committee on Foreign Investment in the United States (CFIUS), which is owned by the US Treasury Department. Everything points to it security check would be terminated taken by several agencies to prevent the Asian giant from interfering with the application. And that there was no intention of retaking it.
TikTok cannot say that the US threat is a surprise. Yesterday it became known that the social network is ready to sell its business in this country or go public. However, it was clear that both These were options of the last resort.. First of all, this was to convince the Joe Biden administration of the feasibility of the Texas project.
The latter consists of “fencing off” the data of TikTok users in the United States, storing and managing it in a structure in the Oracle cloud. Larry Ellison’s firm will also be responsible for ensuring that no information is shared from it without permission. While an independent board chosen by the US government will oversee its overall operation. The project has already been discussed for months, but the tougher criticism of the application will lead to final rejection..
For now, TikTok claims there is no better alternative than Project Texas for data protection in the US. The company claims that the level of security of this offer exceeds that of any other North American company that handles the confidential information of its users. Estimated that the video application has invested over $1.5 billion build this structure.
US demands sale of TikTok
As reported bloombergthe next step for CFIUS will be to initiate the process find and approve a buyer for US TikTok business. A procedure that would be much more complicated than it might seem at first glance. The fact is that the hypothetical next owner of the video application will be forced to platform rebuild algorithm to avoid any possibility of espionage by China.
If that opportunity comes up, the report guarantees there will already be a few interested in getting TikTok. In any case, no specific names are mentioned. Let’s not forget that the eventual purchase of the social network was one of the great soap operas of 2020, when Donald Trump also wanted to veto it. By that time, corporations such as Microsoft, Oracle, and even Twitter had come onto the scene to try and close the deal. But no one made it.
From the side of ByteDance, passions will be very heated. The company will even analyze sue the US if you insist on a sell or lock position. In addition, facing the process of selling TikTok will not be so easy, since China will also have to give its consent.
ByteDance is currently 60% owned by global investors. At the same time, 20% belong to its employees, and the remaining 20% are in the hands of the founders of the company, led by Zhang Yiming and Liang Rubo. Although the voting rights of the latter are greater than those of other shareholders.
If TikTok cuts ties with its Chinese parent, it is estimated that its US business could turn a profit. $40,000 to $50,000 million.
Source: Hiper Textual
I’m Ben Stock, a highly experienced and passionate journalist with a career in the news industry spanning more than 10 years. I specialize in writing content for websites, including researching and interviewing sources to produce engaging articles. My current role is as an author at Gadget Onus, where I mainly cover the mobile section.
