TikTok Owner Prefers Ban In US Than Sell It, Reuters Reports

TikTok’s parent company, ByteDance, would rather shut down the app than sell it if they can’t fight the ban in the U.S, a Reuters report citing four sources.

The algorithms that make TikTok work are really important to ByteDance, so selling the app without the algorithms is unlikely. Most of ByteDance’s money comes from China, and TikTok’s users in the U.S. only make up a small part of their overall users.

It said late on Thursday in a statement posted on Toutiao, a media platform it owns, that it had no plan to sell TikTok, in response to an article by The Information saying ByteDance is exploring scenarios for selling TikTok’s U.S. business without the algorithm that recommends videos to TikTok users.

The company continues to make most of its money in China, mainly from its other apps such as Douyin, the Chinese equivalent of TikTok, separate sources have said.

TikTok’s daily active users in the U.S. also make up just about 5% of ByteDance’s DAUs worldwide, said one of the sources.

It would be impossible to divest TikTok with its algorithms as their intellectual property licence is registered under ByteDance in China and thus difficult to disentangle from the parent company, said the sources.

Former U.S. Treasury Secretary Steven Mnuchin has expressed interest in putting together an investor group to try to buy TikTok. ByteDance may struggle to attract any buyers for TikTok’s U.S. assets excluding algorithms, the sources said.

Kenya rules out banning TikTok

A similar debate of banning the Chinese app in kenya has been active.

However, Kenya’s government has advised lawmakers against banning TikTok over concerns about content shared on the platform, and instead recommended stricter oversight by regulators.

A panel in parliament has been considering a petition from a Kenyan citizen to ban the Chinese-owned platform. The recommendation follows accusations from the interior ministry that the platform has been used to spread propaganda, carry out fraud and distribute sexual content.

Rather than imposing a ban on TikTok, the ministry proposes adoption of a co-regulation model,” the information and communication ministry said.

The ministry proposed requiring TikTok to screen content to ensure compliance with Kenyan laws and file quarterly reports to the government on what material it had taken down.

The company has been facing regulatory scrutiny in a number of countries, particularly in the West.

Last month, Italy slapped three TikTok units with fines for inadequate checks on content deemed potentially harmful to children or vulnerable users.

The U.S. Senate approved legislation on Tuesday that would ban TikTok in the United States if ByteDance fails to divest over the next nine months to a year.

The move was driven by widespread worries among U.S. lawmakers that China could access Americans’ data or surveil them with the app.