TikTok’s parent company, ByteDance, has issued a statement denying intentions to sell the business but instead prefer to shut the platform down. This news comes after the US government passed a bill requiring ByteDance to sell the platform or see it banned in America. The bill was signed into law by President Joe Biden earlier this week over long-standing claims that the company’s ownership structure could allow China access to the data of millions of American users. Over 30 states, including Canada and the European Union, have banned the app from government-owned devices over concerns it could be a security risk. ByteDance now has nine months to sell the app’s stakes in the United States; failure to do so will result in TikTok being banned from US markets and removed from the Apple and Google Play Store.
ByteDance confirmed on its Toutiao account that it does not plan to sell TikTok; foreign reports suggesting otherwise are not accurate. The company claimed that “ByteDance doesn’t have any plans to sell TikTok” and shared a screenshot of the article with the Chinese characters meaning “false rumour” stamped over the top. According to sources, ByteDance’s 2023 revenues increased to nearly $120bn from $80bn in 2022, and the US accounted for approximately 25% of TikTok’s overall revenues last year. The app’s daily users in America make up around 5% of ByteDance’s DAUs worldwide.
The controversy surrounding the platform comes shortly after the Universal Music Group (UMG) announced its intention to withdraw music from its signed artists from TikTok. According to Music Business Worldwide, in the event of UMPG’s expiration on TikTok, “any recording of a song currently available on TikTok that has been co-written by a songwriter signed to Universal Music Publishing will also need to come down.” An estimated 30% of the platform’s “popular songs” could be lost to the decision, with industry estimates revealing that up to 80 percent of all music on TikTok could be muted.
ByteDance does not publicly disclose its financial performance but continues to make most of its money in China from other apps, including Douyin – the Chinese equivalent of TikTok. It is expected that TikTok will win a legal challenge to block Biden’s legislation. However, ByteDance would not agree to sell its “secret source” to rivals, referring to its algorithm. TikTok’s CEO, Shou Zi Chew, also stated on Wednesday that the social media company is expected to win the legal challenge to cancel Biden’s legislation
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