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TikTok digs in to fight US ban with 170 million users at stake

Zheping Huang, Sarah Zheng, Bloomberg News on

Published in Business News

EU regulators gave TikTok until April 23 to submit the missing report and until April 24 to defend itself against the suspension of the rewards program “pending the assessment of its safety.”

It was also handed a May 3 deadline to respond to other questions about how the app plans to protect minors and the mental health of users.

In the U.S., ByteDance thinks it stands a good chance of pushing back on the proposed law in U.S. courts. It’s arguing that forcing 170 million Americans off the platform will deprive them of their First Amendment rights to free speech, a forceful approach in the American judicial system.

“We’ll continue to fight,” Michael Beckerman, TikTok’s head of public policy for the Americas, said in a memo to TikTok’s U.S. staff. “This is the beginning, not the end of this long process.”

For now, it appears neither side is willing to budge. But ByteDance has seen how quickly the tides can turn in Washington.

The preliminary 2020 sale agreement didn’t go through after Donald Trump was voted out of office and Biden showed less interest in pursuing his predecessor’s deal. Trump last month raised concerns that a ban against TikTok could boost its rival Meta Platforms Inc., which previously suspended Trump from its platforms. Americans go to the polls again this November. ByteDance expects it can get a restraining order on the legislation and then wage a legal battle that could last more than a year, according to one person familiar with the matter.

 

“It’s also a U.S. election year, so no matter what you do, they can only wait until after the election to see what the situation is like,” said Zhu Feng, executive dean of Nanjing University’s School of International Studies.

Beijing is a big hurdle to any sale of TikTok. A TikTok divestiture would require approval from Chinese regulators, who are unlikely to accommodate Washington’s plans. The government there has made it clear it wants neither TikTok’s prized algorithms nor its valuable data to fall into American hands, a person familiar with TikTok’s thinking said, asking to remain anonymous discussing company deliberations.

TikTok’s technology — most apparent in the platform’s addictive scroll of recommended videos that keep users hooked and wanting more — was an issue even back in 2020.

Under Trump, TikTok struck a complicated deal to spin out and sell a slice of TikTok to Oracle Corp. at a $60 billion valuation, upon which the U.S. software firm would become its sole U.S. data management partner. But ByteDance would retain control of the actual technology.

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