Summary
Since its inception, TikTok has generated controversy on social media as lawmakers have expressed worries about the platform’s security and privacy due to its ownership by a Chinese firm.
A ban seems more imminent than ever, but its parent company ByteDance has refuted all allegations that it exchanges data with the Chinese government or that there are privacy concerns.
With a resounding majority, a measure mandating its outlawing in the United States cleared the House of Representatives and will now go to the Senate. Joe Biden has said that he will sign the measure if it passes the Senate, forcing ByteDance to shut down its US operations.
Can the platform be preserved, though? The ownership of TikTok, not the platform itself, is the problem, so if ByteDance could find an American buyer for the brand, the dance may continue, but with whom?
OUTRIGHT SELLING TO A US COMPANY
It is not a given that ByteDance would agree to sell the whole TikTok platform and brand to an American business. Even though the great majority of TikTok users are from outside the nation, the platform does generate a significant amount of cash there, mostly from its TikTok store operation.
The speeches and hearings make it very evident that American lawmakers will not consent to a middle-ground solution in which ByteDance retains ultimate control of TikTok but someone else runs the platform.
It’s also improbable, however, that ByteDance would abandon its non-US operations. Additionally, it would need to get the Chinese government’s consent for any sales, which may be challenging.
granting a U.S. company a brand license
A franchise arrangement that would include two TikToks—the worldwide version owned by ByteDance and the U.S. version owned by an American business that licenses the rights to the app, the brand, the algorithm, and all of its code—might be one way to resolve the issue.
The two platforms may never work together, which would keep U.S. users isolated and unable to access content from other countries, but it would enable the platform to be operational in app stores and even online. This could get very complex.
It is also something that already occurs with ByteDance’s Douyin, a TikTok-like platform that is exclusively accessible in China but is based on the same core technology. Additionally, there isn’t any connection to TikTok. A such agreement may apply to both US and international TikTok.
In the US, who may license TikTok?
ByteDance will not want to sell to an established social media firm since it would mean giving up its trade secret to a worldwide rival. This is assuming the company can overcome the obstacle of Chinese government clearance and reach a profit sharing or licencing deal to build U.S. TikTok.
One possible participant in this market is Oracle. Walmart and the corporate IT giant have previously been considered as possible purchasers of the social video network.
Oracle does not currently have a social media network that would allay ByteDance’s fears about competition, but it does have a cloud platform of its own that could house the video content and services.
Oracle was supposed to host all TikTok user data in the United States and secure computer systems domestically under the terms of the previous agreement mediated by Donald Trump. However, the sale never happened because it was based on a Trump executive order that was dropped and subsequently upheld in court before the 2020 presidential election.
FORMING A NEW BUSINESS IN TIKTOK U.S
Avoiding a sale and establishing TikTok U.S. as a separate business with its own stock offered to American consumers while remaining linked to the larger TikTok network is one way to resolve the issue.
ByteDance would get a smaller stake and no voting power under this proposal. This might be in line with the provisions of the new law, which stipulates that ByteDance cannot maintain any operational control over the business in the United States even if it retains a portion of the ownership.
There would be fewer bidders since even a small share in TikTok, one of the biggest social media applications in the US, would need billions of dollars. However, as the deadline draws nearer, the price can drop, leaving ByteDance with the option of losing everything or maybe even turning a profit.
There would be antitrust difficulties if it sold any significant shares to a large tech firm, thus one possibility would be to pursue an IPO. The issue with it is that public offers take time, and the House of Representatives has given them six months to finish the divestment.
All of this is supposing that ByteDance is not totally banned by the Chinese government and is granted permission to sell any portion of its firm to an American corporation. It is also assumed that the business will accept the prohibition, leave the country, and refuse to absorb the loss by refusing to sell on principle.
Might it reappear in the future?
There is strong support for TikTok’s continued existence, especially among younger users. Some users see it as a more independent news source than others, and millions of producers have used it to launch their enterprises without depending on Google or Facebook.
Even if TikTok is outlawed in the US, it won’t disappear entirely. It will continue to operate on a worldwide scale, serving as many as one billion users in the UK and Europe. Although it won’t be accessible via American app stores, it can still be side-loaded onto an Android device or seen online with a VPN.
Even if it means negotiating an extension to the 180-day limit set by the law, I believe a settlement will be reached. It’s unclear what shape that will take.
All the Information You Require to Understand the Potential TikTok Ban
