ByteDance intends to sell a controlling stake of the social networking service TikTok. The cost of a majority stake of the Chinese company may exceed $10 billion.
A ByteDance spokesman said that there were no discussions held on the partial or full sale of the social network. However, selling a controlling stake became necessary because of claims by the US authorities. They accused ByteDance of collecting data from TikTok users from the USA and transmitting it to the Chinese intelligence services.
TikTok claims that the social network stores all data about US users in the USA, and backups are located in Singapore. But the US authorities do not trust the company and believe that the social network is a threat to national security.
Due to claims by the authorities, Committee on Foreign Investment in the United States, also known as CFIUS, began a review of ByteDance's 2017 acquisition of Musical.ly, which later became known as TikTok.
Even Facebook CEO Mark Zuckerberg addressed TikTok’s threat to US security. The chief executive criticized the platform for censoring users.
"While our services like WhatsApp are used by protesters and activists everywhere due to strong encryption and privacy protections, on TikTok, the China-based app growing quickly around the world, mentions of these same protests are censored, even here in the US," Zuckerberg said in a public speech at Georgetown University in October.
Now, pressure from the US authorities is forcing the Chinese company to sell social networks. Potential buyers may be investors, including SoftBank Group, Sequoia Capital, and Susquehanna International Group. Also, ByteDance intends to turn to lawyers for protection from restrictive sanctions by US regulators. The Chinese company hasn’t made its decision about TikTok yet. So far, only options have been discussed.