With less than six months to go, no clear plans for a TikTok sale
With less than six months to go, no clear plans for a TikTok sale
The Justice Department sued social media giant TikTok and its Chinese parent company, ByteDance, on Friday, alleging the platform illegally collected personal data from children.
TikTok responded saying it “disagrees” with the accusations.
This comes amid a broader beef between the U.S. government and TikTok. Congress has expressed concern that the Chinese government could collect information on Americans or wage an influence campaign through TikTok.
And this April, President Biden signed into law a bipartisan bill compelling ByteDance to sell TikTok to a government-approved buyer in 270 days — or face a ban in the U.S.
That deadline — Jan. 19, 2025 — is now less than six months away.
Quick reminder: TikTok is big. Like, used by more than a third of Americans, big, said Anupam Chander, a law professor at Georgetown.
“If you want to promote something, this is the best way to promote it currently in the United States,” Chander said.
Chander said that means there are plenty of eager, would-be buyers for the platform. But as for the seller, “TikTok has said that it is impossible for it to sell for legal and practical reasons,” Chander said.
One of those practical reasons: there’s not much time, said Florian Ederer of Boston University’s Questrom School of Business.
“These deals require a lot of negotiation,” Ederer said. “This isn’t a deal where you buy up a small, you know, multi-million-dollar company.”
He added a TikTok sale could run well into the tens of billions of dollars. A deal that complex would be hard to pull off by January.
“If I had to bet on whether we see a sale that’s completely done and dusted, I would probably bet against it,” Ederer said.
TikTok did not respond to a request for comment.
A group of TikTok creators sued the government, claiming a forced sale violates the First Amendment. Oral arguments are next month. James Lewis with the Center for Strategic and International Studies said TikTok’s owners are expecting a win in court.
“They are wildly optimistic,” Lewis said.
To the point, Lewis said, the company isn’t even engaging in serious talks for a sale.
“A lot depends, as you know, with everything in Washington, on the outcome of the election,” Lewis said. “So, there’s no reason for the company or for the Chinese government to make any concessions now.”
Lewis added firms that advertise on TikTok are less sure, and they’re making fallback plans in case of a ban.
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