US President Joe Biden has signed a law that would force a sale of TikTok's US operations. Most recently, Bobby Kotick was discussed as a possible investor.
Last March the rumor startedthat Bobby Kotick, once at the top of the publisher Activision Blizzard, which was taken over by Microsoft, has its eye on TikTok. He had “expressed his interest” to Zhang Yiming, the co-founder of the Chinese operator ByteDance, to the Wall Street Journal and was looking for financially strong partners to participate in a purchase.
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While it remains unclear whether Kotick is actually interested in TikTok or the platform's US business, the US President is serious: the speculation surrounding a possible (partial) sale of the social media platform is triggered by an impending ban in the USA. The necessary law was signed by Joe Biden this week.
ByteDance has (initially) 270 days left
The Protecting Americans From Foreign Adversary Controlled Applications Act gives ByteDance 270 days to sell the app. A possible 90-day extension is at the discretion of the President if certain progress toward a sale has been made.
The law explicitly refers to ByteDance and TikTok, but can also be applied to other companies “controlled by foreign enemies” provided they meet certain requirements. That includes about a million monthly active users and the president's determination that they pose a significant threat to national security.
TikTok operator wants to defend itself against the law
If sold, the next social media giant would be in American hands. Facebook, Instagram and Co are already based in the USA. However, ByteDance is far from giving up.
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“This unconstitutional law is a TikTok ban. And we will challenge it in court. We believe the facts and the law are clearly on our side and will ultimately prevail. The fact is that we have invested billions of US dollars to keep data secure in the USA and our platform free from external influence and manipulation,” it said in an initial statement.
In fact, the Chinese are unlikely to be impressed by the new law. As early as 2020, when ByteDance was under massive selling pressure from the Trump administration, the government opposed such measures and tightened export regulations for technologies.
Also Alex Heath from The Verge wrote this weekthat employees at ByteDance and TikTok had assured him over the years that they would not part with the app.
A ban, if truly enforceable, would fall within the term of the next president. After his efforts four years ago, Trump, a possible challenger in the next presidential election, is now positioning himself against a ban.
In addition, the law would only affect availability in US app stores, but not use on the devices themselves. Alternative download stores and VPN connections usually allow such restrictions to be circumvented.
Which investors are getting into position?
Back to Bobby Kotick: The former CEO of Activision Blizzard did not speak publicly after the rumors about his interest in TikTok. Other investors however, yes.
Investment banker and film producer Steve Mnuchin would like to put together a group and take over the social media platform. The same applies to Canadian businessman Kevin O'Leary. The video-sharing platform Rumble is also “ready to join a consortium with other parties that want to acquire and operate TikTok within the USA.”
Microsoft expressed interest in acquiring TikTok in 2020 when both companies began negotiations in the wake of the then-threatening ban. They failed in the end, but could become relevant again due to the new push in the USA. Oracle and Walmart were also interested four years ago.
More news about TikTok.
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