Senate Passes Bill Giving TikTok Parent Co. Ultimatum to Sell or Get Banned

Sources claim that the Chinese-based company ByteDance would prefer to let the United States ban the video-sharing app TikTok rather than divest from the social media platform as the legislation signed last Wednesday by President Biden would require.

The US Senate last Tuesday passed the supplemental foreign aid package that, in addition to providing funding to Ukraine and Israel, included the TikTok divestment provision. President Biden signed the package into law the following day.

Under the provision, the president gave ByteDance until January 19, 2025, to divest from the popular social media app to prevent TikTok from being banned in the United States.

Sources initially claimed that the Chinese-based company was considering selling TikTok’s American business without the algorithms the platform relies on for operations. However, ByteDance denied the claim, saying it had no plans to comply with the law and divest from the platform.

On Thursday, sources close to ByteDance said the company would prefer letting the platform shut down in the US rather than selling it to an American company. The social media platform accounts for only a small portion of ByteDance’s revenues and a US ban would have little effect on the company’s business, the unnamed sources said.

TikTok CEO Shou Zi Chew said last Wednesday that the platform expected its legal challenge would block the law from taking effect.

The legislation, passed by the Republican-controlled House on April 19, was prompted by concerns from lawmakers and national security officials that ByteDance was sharing personal user information with Beijing. US officials also accuse Beijing of using the social media platform as a malign influence operation to push CCP propaganda on TikTok’s 170 million American users.

While ByteDance does not publicly disclose the financial details of any of its platforms, a source claimed that American users accounted for about a quarter of TikTok’s revenues in 2023.

ByteDance makes most of its revenue in the Chinese market where TikTok is banned, mainly from its other social media platforms like Douyin.