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The Difficulty of Selling TikTok

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The battle over the future of TikTok is heating up as legislation that could mandate a sale of the popular social media app moves forward. The House recently approved a bill that would require ByteDance, TikTok’s Chinese parent company, to sell the app to a buyer approved by the government in order to avoid a ban.

However, the road to a potential sale is fraught with challenges. ByteDance would have to arrange a sale that ensures TikTok is not under the control of a foreign adversary, such as China, within six months. This would mean cutting all ties with the app, including its algorithm that personalizes users’ feeds.

The options for potential buyers are limited, with the U.S. portion of TikTok alone estimated to be worth over $50 billion. Tech giants like Google or Microsoft could afford the purchase, but may face antitrust concerns. Alternatively, a group of investors could team up to raise the necessary funds, or ByteDance could pursue a spinoff into a stand-alone public company.

The Chinese government has already criticized the legislation, signaling potential roadblocks to a sale. China could try to block the sale of the app, as it did when former President Trump attempted to force ByteDance to sell TikTok in 2020. Regulators in the U.S. and Europe could also pose challenges to a sale by big tech companies.

If ByteDance is forced to sell TikTok, it would mark a major escalation in the digital cold war between the U.S. and China over control of critical technology. The future of TikTok hangs in the balance as the battle for its ownership continues to unfold.

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