Between shutting down or selling TikTok, owner ByteDance would prefer doing the former.

This according to Reuters, which cites four sources. ByteDance's worst-case-scenario decision comes after President Joe Biden signed a bill forcing TikTok's Chinese parent to either sell the social media platform to an entity that satisfies Uncle Sam, or have its video-sharing app banned from US software stores.

There is a fear stateside that China-based ByteDance could be forced by Middle Kingdom mandarins to manipulate TikTok, one of the biggest social media platforms in the United States, to spread misinformation or snoop on Americans. The House, Senate, and Biden all rubber-stamped the sell-or-ban bill.

The law says ByteDance must divest itself of TikTok by January 19, 2025, the day before President Biden's term as president expires, or get the ban hammer. That deadline may be extended by three months. It's also worth remembering that Western social media, such as Facebook and Reddit, is already by and large blocked in China.

TikTok CEO Shou Zi Chew plans on overturning the US legislation, officially titled the 21st Century Peace through Strength Act, using the courts. "Rest assured, we aren't going anywhere," Chew said in a video on his own app as the bill was signed into law. "The facts and the Constitution are on our side and we expect to prevail again."

However, in the event that ByteDance's legal challenge fails, it seems the biz would rather shut down the wildly popular software altogether. The report says the US only provides a quarter of TikTok's global revenue, and just five percent of ByteDance's daily active users across all of its media platforms across the globe, which makes selling the platform more trouble than it's worth.

The fact that the deadline to sell isn't even a year from now would likely put downward pressure on the potential sale price, making the option even less appealing.

Additionally, the algorithms that power TikTok and its video recommendations - the life blood of the app and its audience - would also become a headache in the event of a divestiture. ByteDance uses the same algorithms for TikTok and its other apps, apparently, and since these are registered in China it would be complicated to sell them in the US. Not that ByteDance would want to do that, since it doesn't want any rivals to get access to the code.

It was also rumored that ByteDance might sell TikTok without its algorithm, though the biz said in a statement on Toutiao, another platform it owns, that it has no intention to flog off the app to anyone. We've asked ByteDance for more details.

Unfortunately for Steve Mnuchin, former Treasury Secretary, this week's turn of events likely means he will not be buying TikTok as he hoped to last month. ®

https://www.theregister.com//2024/04/25/bytedance_tiktok_law/