The Messy TikTok Sale Is What Happens When Governments Get Involved in Social Media
Will America’s favorite video app fall prey to executive overreach? It’s looking more and more likely that it will.
Fans of the app (or just of freedom) hoped that President Donald Trump’s arbitrary ban on TikTok—part of a techlash-y executive order prohibiting American transactions with Tencent Holdings, the Chinese company behind messaging service WeChat, and ByteDance, the entity behind TikTok—could be at least partially circumvented by a U.S. company buying TikTok. The American tech companies Microsoft and Oracle were both in talks about snapping up the popular video platform.
On Sunday, Microsoft announced that it was out of the running. “ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft,” it declared.
“Oracle Wins Bid for TikTok in U.S., Beating Microsoft,” announced The Wall Street Journal, with a range of other publications following suit.
But it’s not at all clear that Oracle is in fact getting TikTok.
Chinese state media reported Monday morning that “ByteDance will not sell TikTok’s U.S. operations to Microsoft or Oracle, nor will the company give the source code to any U.S. buyers,” citing “sources.” (ByteDance did not comment.)
“China released a revised catalogue of technologies that are subject to export bans or restrictions at the end of August, which means that ByteDance may have to obtain a license from the government to proceed with TikTok’s sale to an American company,” reports CGTN.
Note the may before have to obtain there—it’s possible that this is the Chinese authorities puffing themselves up more than it is an insurmountable obstacle for ByteDance.
According to a recent lawsuit against Trump’s TikTok order—filed by a former TikTok employee represented by constitutional lawyer Mike Godwin—ByteDance isn’t based out of China anymore but rather the Cayman Islands, with TikTok headquartered in Culver City, California. “TikTok is neither owned, operated, nor controlled by China or the Chinese government. Indeed, TikTok does not even operate in China,” states the suit.
In any event, “the clock is ticking on TikTok’s fate,” notes TechCrunch:
Beijing was ostensibly absent from ByteDance’s negotiations with Washington in the early days, but that seems to have changed as the deal’s deadline inches closer, with the U.S. government threatening to shut down the service in 45 days from August 6 (September 20) if ByteDance didn’t find a local buyer for the company.
First, the Chinese government revised its export rules that could block the transfer or sale of ByteDance’s recommendation algorithms, and now there’s the state report refuting rumors that Oracle has secured the deal.
The acquisition of TikTok’s U.S. assets has been rumoured to be for as much as $50 billion, according to reports.
ByteDance’s rise to prominence is closely linked to its use of algorithm to serve up videos, memes, news articles and other forms of content across its family of apps. Machine learning does away the need for human curation and even social and interest graphs, forming virtuous cycles within ByteDance services—the more content one consumes, the better the apps get at predicting one’s interest. The data-driven process transcends cultural differences, arguably why TikTok became the first consumer app from China to conquer the West.
The South China Mo
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