The deadline for a sale is set for January 19, 2025.
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ByteDance, TikTok’s Chinese parent company, would rather close the video portal in the US rather than sell it, Reuters reports, citing four unnamed sources.
US President Joe Biden recently signed a law that could result in a ban on TikTok in the US.
According to the law, ByteDance has nine months to a year to separate from the company.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
ByteDance, TikTok’s Chinese parent company, would rather shut down TikTok in the US than sell it if legal challenges to a planned ban in the US fail, reported Reuters citing four unnamed sources.
A sale is unlikely because the algorithms that power the short-video app are central to ByteDance’s overall operations, the sources told Reuters. They also pointed out that TikTok represents only a small portion of the company’s total revenue and active users.
Shutting down the app would therefore limit the impact on ByteDance’s business and allow the company to retain control of its algorithm, the sources said.
TikTok could be banned in the USA – is that realistic?
President Joe Biden recently signed a law that would ban TikTok in the United States if ByteDance does not divest from the app within the next nine months to a year.
The move follows concerns from US lawmakers that China could use the app for surveillance activities and to collect data on US citizens.
However, TikTok CEO Shou Zi Chew said he was confident the company would win the legal battle.
“We are confident and will continue to fight for your rights in court,” he said, “The facts and the Constitution are on our side and we expect we will prevail.”
The deadline for selling the app is set for January 19, 2025, but an extension is possible if ByteDance can demonstrate progress toward a sale.
The decision follows a report in the US business publication “The Information” Earlier this week. It said ByteDance was exploring options for selling a majority stake in TikTok’s US business.
The report, citing three people familiar with the situation, said ByteDance would prefer to sell to a non-tech company. At the same time, they don’t want to give up the algorithm that recommends videos to app users.
ByteDance itself says that the rumors of selling TikTok “are untrue.”
Business Insider has contacted ByteDance for comment.
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