The TikTok platform declared on Wednesday that it would use all possible legal avenues against the law that the White House has just promulgated and which requires it to cut all ties with China, if it does not want to be banned in the United States . Review of the main options available for the company.
What the law says ?
According to the text, signed by US President Joe Biden, TikTok now has 270 days (nearly nine months) to find new non-Chinese investors, otherwise the application will be banned in the United States. The White House may grant an additional 90 days. During this period, TikTok, which has 170 million American users, can continue its activities normally in the United States.
What steps before the courts?
ByteDance, the parent company of TikTok, has already announced that it will fight in court against the law which, according to it, violates the freedom of expression of its users, guaranteed by the First Amendment of the American Constitution.
The company has reason to be optimistic: it already managed to reverse a similar executive order from former President Donald Trump in 2020. It then filed an appeal and a judge temporarily suspended the executive order, finding that the reasons given for the ban were exaggerated and freedom of expression threatened. The Trump government then tried to force the sale of TikTok to the Oracle and Walmart groups, without success.
The new law aims to circumvent the difficulties previously encountered. Experts believe that the Supreme Court could be sensitive to the national security arguments put forward by elected officials, without certainty, however.
Republican candidate facing the outgoing president for the elections next November, Mr. Trump now says he is opposed to the ban on TikTok, which he believes would benefit Meta (Facebook, Instagram).
Who can buy TikTok?
Finding a company that can afford TikTok is no easy feat in itself. It is unlikely that the digital giants, Meta or Google in particular, will embark on such an operation due to the risks of concentration of the social network sector that this would imply. Even Microsoft, owner of the professional social network LinkedIn and now the world’s largest capitalization, could have difficulties with the competition authorities if it embarked on the operation.
Oracle could, however, return to the game. Since its first takeover attempt, pushed by the Trump government, the group has helped TikTok meet US national security requirements through a program, “Project Texas”, which places American user data in a separate company , but still under the control of ByteDance.
Mr. Trump’s former Treasury Secretary, Steven Mnuchin, expressed interest and said earlier this month that he was creating a consortium of investors to make an offer for ByteDance. But he has little experience in the technology sector and experts say his ambitions in this area are exaggerated.
What happens without an offer?
Unless the courts decide otherwise, ByteDance has until April 24, 2025, including a possible extension of the deadline, to find a buyer for TikTok. If the Chinese group does not succeed, it will see its social network disappear from the Apple and Google application stores and will no longer be able to update it. In other words, the app will slowly wither away in the United States, unless ByteDance decides to shut down TikTok entirely in that country.
What is China’s position?
China has begun to weigh in on the battle for TikTok’s American future. For Beijing, the risk is to see the situation of the social network create a precedent in which a Chinese company has its arm twisted to resell one of its most profitable assets – in particular its algorithm, which its competitors envy.
China does not want its successful companies to suffer a similar fate in the future. The subject was raised during the telephone exchange between Chinese President Xi Jinping and Mr. Biden earlier this month.
Who can benefit from it?
The big winners from a potential ban on TikTok would be Meta and Google, which launched equivalents to entertaining short videos, Reels and YouTube Shorts. Both would gain market share in the United States, while TikTok seems to be plateauing, undoubtedly due to concerns about its future.