ByteDance Chooses Shutdown Over Sale for TikTok in the U.S. Amid Legal Challenges

by Kay Lee

ByteDance, the parent company of TikTok, has opted to shut down its operations in the United States rather than sell the app, if it fails to overturn a legislative ban through legal means. This decision follows extensive speculation regarding the fate of TikTok in the U.S., as government scrutiny over data privacy concerns intensifies.

According to sources familiar with the matter, ByteDance is not considering the sale of TikTok because the algorithms central to the app's operation are deemed integral to the company’s global strategy. Despite TikTok's massive user base and popularity, it constitutes only a minor portion of ByteDance's overall revenue, making a complete shutdown a more palatable option for the company than divesting its core technology.

U.S. House Moves to Ban TikTok Over Security Concerns
This legislation, known as “Protecting Americans from Foreign Adversary Controlled Applications Act,” aims to safeguard American citizens from apps influenced by adversarial nations.
The Internet ProtocolKay Lee

The U.S. government has raised alarms about potential risks of Chinese government access to American user data via TikTok, prompting legislation aimed at either forcing a sale of TikTok’s U.S. operations or banning the app entirely from U.S. app stores. The recently signed law gives ByteDance a nine-month deadline to comply, with the possibility of a three-month extension.

In response to these developments, ByteDance has expressed its intentions to combat the legislative measures in court. TikTok’s CEO, Shou Zi Chew, emphasized the company’s commitment to protecting user rights through legal avenues. He voiced confidence in prevailing by aligning their arguments with constitutional protections.

Despite these assurances, the future of TikTok in the U.S. remains uncertain. If ByteDance's efforts to reverse the ban fail, the company has prepared to close down its U.S. operations rather than compromise on its proprietary algorithms, which are shared with its other applications like Douyin, the Chinese equivalent of TikTok.