Legislation mandating a TikTok sale is advancing. ByteDance faces challenges in divesting the app due to limited options, potential regulatory obstacles, and difficulties in spinning off the business.
The House approved the bill requiring ByteDance to sell TikTok to an approved buyer to avoid a ban. The Senate and president’s approval is still needed. Potential buyers may face constraints, and government interference could impede the process.
ByteDance must ensure TikTok is free from foreign influence, particularly China, within six months to comply with the legislation.
ByteDance may need to decide between selling TikTok globally or segregating its U.S. operations to adhere to the law.
Required Sale under the Bill
ByteDance must relinquish ties with TikTok, potentially complicating compliance while maintaining app operations.
Challenges in Selling TikTok
Selling TikTok, especially the U.S. segment, could be costly and face antitrust scrutiny. Investors or tech giants may explore acquisition options, while ByteDance could opt for a public offering.
Senator Mark Warner suggests potential American or joint American-European ownership post-sale.
Obstacles to a Sale
Legal challenges from ByteDance and opposition from China may hinder the sale. China has criticized the legislation as hegemonic, signaling potential intervention. Regulators may also complicate acquisition attempts.
A forced sale like this has happened before with Grindr, but TikTok’s scale makes it a significant escalation in the digital conflict between the U.S. and China.
