U.S. Tries To Force ByteDance To Sell TikTok Again – But There’s No Way In Hell China Will Allow The Sale

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Mar 15 2024
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TikTok has about 170 million users in the United States, its biggest market outside of China. Its revenue was around US$20 billion last year. Founded in 2012 by entrepreneur Zhang Yiming, TikTok owner ByteDance reportedly had a private valuation of between US$105 billion and US$110 billion in May 2020, making it the most valuable start-up in the world.


ByteDance recorded revenue of US$120 billion in 2023 – up about 40% from a year earlier, driven by TikTok’s exploding growth. In comparison, Meta’s 2023 revenue rose 16% to US$134.90 billion. In the U.S. alone, the short video app’s revenue hit US$16 billion last year. One Bloomberg analyst even speculated that it could be worth up to US$180 billion in an IPO (initial public offering).


For years, tech giants like Facebook and YouTube have been competing directly with TikTok. In April, 2020, thanks to Coronavirus lockdown, TikTok amassed over 2-billion downloads on Google Play Store and Apple’s App Store, largely because people “trapped” at home wanted to keep themselves entertained. It came just 5 months after it surpassed 1.5 billion downloads.

TikTok App 

It means on average, there were 100-million downloads every month leading to the 2-billion milestone. It became the first app after WhatsApp, Instagram and Messenger to break past the 2-billion downloads since 2014. As TikTok’s popularity skyrockets, so does its revenue. Users spent a whopping US$456.7 million when it hit a 2-billion downloads, up from US$175 million when it hit 1.5-billion downloads.


However, like his predecessor Donald Trump, President Joe Biden has again tried to force ByteDance to sell TikTok. The US House of Representatives on Wednesday (March 13, 2024) overwhelmingly passed a Bill that requires ByteDance to divest its U.S. business within 6 months, or face a ban. While an approval from Senate is needed before it becomes law, Biden said he would sign the bill if it reached his desk.


In what appears to be a shameless theft of the Chinese developed app, former treasury secretary Steven Mnuchin reveals that he is putting together a group of investors to buy TikTok. He said – “I understand the technology, it’s a great business, and I’m going to put together a group to buy TikTok”. So, is TikTok being forced to sell because of national security or business greed?

Steven Mnuchin with a Sheet of One Dollar Bills

How is America any different from China, the so-called communist country practising autocracy which the U.S. has belittled, comparing it to the Western’s superior democracy and freedom of speech? What happens to the U.S. Constitution that forbids lawmakers from passing laws to criminalize a specific individual or business? Doesn’t the U.S. recognize human rights anymore?


In March last year, U.S. President Biden told ByteDance, the owner of TikTok, that the Chinese company faces a potential federal ban if it does not divest its ownership in the app. Washington argues, like a broken record, that information gathered by the app could be used to benefit Chinese intelligence or propaganda campaigns. But the U.S. could not prove its own accusation.


So far, there is “no public evidence” the Chinese government has actually accessed the personal information of TikTok’s U.S. users or used that data to influence them. It appears the U.S. was trying to destroy TikTok because of jealousy more than due to national security threat. And Washington wanted to take over (or rather steal) the app by force due to its popularity.

TikTok - USA vs China

Accusing TikTok of serving as a Trojan horse for Beijing to manipulate – even control – America and steal sensitive data on U.S. citizens is just a lame excuse. If the app is as dangerous as claimed by Washington, it should have been banned years ago. Instead, American buyers, including a former Treasury Secretary, begin lining up to bid for its U.S. operations.


Forcing ByteDance to sell TikTok to Americans is like forcing Alphabet to sell Google to the Chinese. If it’s impossible for Google’s algorithm to fall into the hands of China, it’s also a wishful thinking that TikTok’s “secret sauce” can fall into the possession of the United States. Yes, the engine or the algorithm is the reason why Microsoft, Oracle, WalMart, Twitter, Netflix and even Triller, a rival app, wanted to buy TikTok previously.


But according to the South China Morning Post (SCMP) – “The car can be sold, but not the engine.” Even if ByteDance wants to sell TikTok’s algorithm, it can’t because an approval from Beijing is needed before Chinese companies can export their technologies. On the other hand, even if China agrees to allow ByteDance to sell TikTok, it can only be sold without the algorithm.

TikTok - ByteDance Core Algorithm

However, TikTok requires the algorithm to function, and the algorithm is Chinese home-grown technology, which in turn is considered China’s national security. Clearly, TikTok is a goldmine. When Trump signed an Executive Order on August 2020 to ban TikTok, Beijing slammed the “forced sale” of TikTok as “theft” and labelled the U.S. as nothing but a “rogue country”.


Microsoft suddenly emerged and announced it was exploring an acquisition for TikTok’s American business. After a phone conversation between Microsoft CEO Satya Nadella and Trump, the “American company” was given the  green light to reach a deal by September 15, 2020. But China Daily mocked and insulted the U.S. for “stealing Chinese technology”.


The scope of the purchase included TikTok operations in the U.S., Canada, Australia and New Zealand. But the plan to split TikTok so that Microsoft controls operations in those countries was a tricky business because it may need to rebuild new infrastructure such as network and servers, not to mention databases and separation of users, all of which could break the algorithm and ecosystem of TikTok.

 Trump Bans TikTok

Eventually, ByteDance announced it won’t sell to either Microsoft or Oracle, let alone give away the source code of the video platform to any American buyers. The best part was when Trump demanded a cut – “key money” – of the TikTok-Microsoft deal. Charlotte Jee, a reporter at MIT Technology Review, said Trump’s request for money from the deal, as if it was a real estate deal, demonstrates Mafia-like behaviour.


The very fact that President Trump had tried to solicit “commission” from a private deal was the clearest proof that the crackdown on TikTok has nothing to do with national security at all. Likewise, President Biden’s attempt to takeover TikTok – by hook or by crook – has again shown the desperation of the U.S. to stop the emergence of China as a technology powerhouse.


Interestingly, Mnuchin was part of a 2020 effort to force a TikTok sale or ban when he led the Treasury Department under President Donald Trump. Since leaving government, Mnuchin has founded Liberty Strategic Capital, a D.C.-based private equity firm focused on technology companies. But forcing ByteDance to sell TikTok could backfire on Biden administration.

Joe Biden Ban TikTok

If ByteDance remains firm and calls Biden bluff, willing to shut down TikTok rather than give up ownership, it will create pressure on lawmakers and the Biden administration. Facing the 2024 presidential election, the president risks offending the current 170 million users in the U.S. Already, lawmakers had received large volumes of calls from teenage TikTok users who oppose the legislation.


Many of TikTok’s 170 million monthly active U.S. users rely on the app to generate income. That includes 7 million small businesses that use the platform to drive growth, according to a report from Oxford Economics. About 39% percent of small businesses say that access to TikTok is critical to their businesses’ existence, while 69% of small businesses say TikTok has led to increased sales in the past year.


But before a ban could happen, it may have to face the court. When the state of Montana tried to ban the app in 2023, a federal judge found it “oversteps state power and infringes on the constitutional rights of users,” with a “pervasive undertone of anti-Chinese sentiment.” The other problem is that Americans have the constitutional right to access all sorts of information.

TikTok Sale and Ban - Protest by US Users

Amusingly, Trump, who had tried to get rid of TikTok, has suddenly made a huge “U-Turn”. Making a comeback to redeem his defeat to Biden, the former POTUS who may return to the Oval Office said – “If you get rid of TikTok, Facebook and Zuckerschmuck will double their business. I don’t want Facebook, who cheated in the last Election, doing better. They are a true Enemy of the People!”


Equally hilarious was the decision by the campaign of president Joe Biden to join TikTok during the Super Bowl. TikTok’s users belong disproportionately to groups that vote reliably for Democrats, which Biden needs desperately. Trump’s campaign does not have an official TikTok account. Banning TikTok outright would essentially cut off young voters from voting for Biden.


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