TikTok said it will fight a new US law that orders the popular video sharing app to break away from its Chinese owners or face an outright ban in the United States.
Here’s what could happen next for one of the world's most downloaded apps.
The bill signed by President Joe Biden gives TikTok 270 days (roughly nine months) to find a non-Chinese buyer or face a ban in the United States.
The White House can extend the deadline one time only by 90 days.
During that time, the app would continue to operate for its roughly 170 million US users.
What will happen in the courts?
TikTok says it will fight the law in the US courts, saying that it grossly violates free speech rights.
The company has some reason to feel that it will prevail; in 2020, the company survived a similar order from then president Donald Trump.
The new effort signed by Biden was designed to overcome the same legal headaches and some experts believe the US Supreme Court could be open to allowing national security considerations to outweigh free speech protection, though this is hardly certain.
Who will buy TikTok?
Finding a buyer for TikTok will be no easy matter given the deep pockets needed to walk home with one of the world's most popular apps.
Big tech's usual suspects, such as Meta or YouTube’s Google, will likely be barred from snapping up TikTok over concerns that they already command too much of the social media market.
Even Microsoft, owner of the more niche LinkedIn and now the world’s biggest company by market capitalisation, would face a hard look by competition regulators.
Oracle could be interested in trying again to take part in a deal.
Since its first attempt during the Trump administration, the company controlled by Larry Ellison helped TikTok devise a way to satisfy US national security concerns in a scheme called Project Texas, which essentially carves out US data into a stand-alone company while the company remains owned by ByteDance.
What if no one buys it?
Barring any decision by the courts, the deadline to sell TikTok would be roughly one year from 24 April if the 90-day extension is used.
Starting around that time, TikTok would no longer be available on the US Apple or Android app stores and, crucially, software updates and bug fixes would no longer take place.
In other words, Tiktok would slowly wither away, with Bytedance unable to update the app, though it could decide to shutter it completely.
What does China say?
China doesn't want a precedent to be set where a Chinese company is strong-armed into selling one of its most valuable assets, including an algorithm that is the envy of competitors.
Fears are also rife that an alarming precedent is being set and that other Chinese companies will face a similar fate in the future.
The TikTok ban was discussed in a phone call between US President Joe Biden and Chinese President Xi Jinping earlier this month. Source: Getty / Joe Raedle
Who benefits from a TikTok ban?
The clear winners from an eventual ban of TikTok would be Meta and Google, which have launched their own copycats of TikTok: Meta’s Reels and YouTube Shorts.
Both alternatives have been gaining ground in the US market, just as Tiktok appears to be stalling, perhaps affected by doubts about its future.
