ByteDance Has To Sell TikTok To Stay In Business In US, But There Is Much At Stake

ByteDance is facing a dilemma -- if it wants to stay in business in the U.S., it has to sell the American version of its hit app, TikTok, withing 90 days as ordered by the Trump administration. But it is easier said than done as there are many complexities, including legal and technical issues, that have to be tackled before the app can be sold.

“There is credible evidence that leads me to believe that ByteDance … might take action that threatens to impair the national security of the United States,” Trump said in his order. The order is in lieu of the executive order he issued on Aug. 6 where he had clarified that he has prohibited specific transactions with TikTok in the U.S. until Bytedance divests it.

As per analysts, selling TikTok will not merely allow ByteDance to save its business in the United States but will majorly strengthen Trump’s legal dominance on the company. Even though companies like Microsoft and Twitter have expressed the intention to buy TikTok’s U.S. operation, their chances of acquiring it are rather slim. Even Microsoft, co-founder Bill Gates has compared the deal to a poisoned chalice.

“Who knows what’s going to happen with that deal,” Gates said in a recent interview. “But yes, it’s a poison[ed] chalice.”

The second option for ByteDance is to give up on the U.S as its market

While ByteDance CEO and founder Zhang Yiming has the option of not selling TikTok and instead just forgetting the U.S. as a potential market. TikTok’s sister app Douyin, which operates only in China, earns the majority of both apps’ revenue thus making the loss of the U.S. market not that difficult to overcome. But as the U.S is where TikTok’s majority subscribers come from, it may slow down its growth. But in both the scenarios, it’s popularity will take a major hit.

ByteDance could challenge the order

ByteDance can and, apparently, it will take the issue to the courts where it will challenge the Trump administration’s decision. The company has already clarified that they will “pursue all remedies available” to “ensure the rule of law is not discarded”.