TikTok parent company plans to close down U.S. operations if legal battle fails = sources | Reuters

HONG KONG (Reuters) – ByteDance, which owns the company that operates the Chinese video-sharing app TikTok, has filed a lawsuit in court seeking to overturn a law passed in the United States that bans the distribution of the app. If the fight doesn’t work out, he would rather shut down TikTok’s U.S. operations than sell them. This was announced by four people involved.

U.S. law prohibits TikTok from distributing the app nationwide unless it sells its U.S. business to a non-Chinese company within about nine months.

However, these people close to ByteDance say the algorithm TikTok relies on is considered a core element of ByteDance’s overall business, and it is extremely unlikely that TikTok will be sold with the algorithm attached. .

Meanwhile, TikTok accounts for a small portion of ByteDance’s total revenue and daily active users, and in the worst-case scenario, the company would likely wind up shutting down rather than being bought by a U.S. company.

Officials believe that if ByteDance doesn’t let go of important algorithms, shutting down TikTok will only have a limited impact on the company’s overall business.

US IT news site The Information has reported that ByteDance is exploring ways to sell TikTok’s US business without the algorithm that selects recommended videos for TikTok users.

However, ByteDance denied the report on the 25th, stating that it has no plans to sell TikTok.

ByteDance does not release detailed financial statements for its subsidiary, but the U.S. business accounted for about 25% of TikTok’s total revenue last year, another person said.

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