The News
Former U.S. Treasury Secretary Steve Mnuchin said he’s putting together a group of investors to buy TikTok after the House passed a bipartisan bill that would force the app’s Chinese parent company to divest — or risk a full ban in the U.S.
Mnuchin called it a “great business,” saying he expected the bill to be passed by the Senate — where its fate still remains unclear.
However, the Chinese government doesn’t want ByteDance to sell to a U.S. buyer, with the foreign ministry’s spokesperson Wang Webin accusing the U.S. of using “robber’s logic to try every means to snatch from others all the good things that they have.”
“If the pretext of national security can be used to suppress excellent companies from other countries arbitrarily, there is no fairness or justice to speak of,” Wang said Thursday.
Last year, Beijing’s commerce ministry said it would “firmly oppose” a forced sale. Mnuchin has argued: “There’s no way that the Chinese would ever let a U.S. company own something like this in China.”
SIGNALS
China won’t give up TikTok’s secret and powerful algorithm
“The heart of the conflict is which country can lay claim to TikTok’s powerful algorithm,” the Financial Times wrote last year after Chinese officials indicated they would not approve a transfer of the app’s secretive algorithm to the U.S. if forced into a sale.
Beijing has repeatedly said that it considers TikTok’s algorithm as “home-grown technology” that is important for its national security, noted Richard Windsor, founder of research company Radio Free Mobile. “Hence, it will not allow Chinese technology of this nature to leave its shores or to be in the hands of countries which it considers unfriendly,” Windsor added, and it would likely be challenging for any U.S. company to own TikTok without its algorithm.
A TikTok sale faces cost and antitrust challenges
Only Silicon Valley bigwigs like Amazon, Microsoft, Google, and Meta could afford buying TikTok at an estimated value of $100 billion or more, but they could face “substantial antitrust concern,” a former Justice Department official told CNN.
However, if the bill becomes law and survives likely court challenges, it could bring down the sale price. The bill’s stipulated six-month deadline for ByteDance to sell or face a nationwide ban could also force the price down for buyers, a technology expert told Fortune.
Banning TikTok won’t solve data security concerns, experts say
Some privacy experts said the bill is more “symbolic” than substantial since the Chinese-owned app isn’t the only company that could be misusing and selling user data. Banning TikTok would be like ”patching one hole in a very leaky boat,” one security expert told ABC. ” “It doesn’t actually make us safer.”
Privacy concerns with TikTok receive outsize attention because of its links to China, but Americans also use other popular Chinese-owned apps like Temu and Shein. The imperative is on Congress to pass a privacy law that could apply to all apps, including those owned by U.S.-based companies, privacy experts told PBS Newshour.
