TikTok has more than a billion users and has a huge influence among the youth and creates various trends. Despite this success, if ByteDance is forced to sell the company, TikTok will not easily find a buyer. How is this possible?

TikTok would be worth over $50 billion

In 2020, the Trump administration tried to ban the TikTok app in the US, fears were also linked to Chinese influence. Currently, the pressure on TikTok has increased, especially in the US, and there is increasing talk of forcing the ByteDance group, which owns TikTok, to sell the hugely popular social network.

It will be difficult, however, even though TikTok has what Facebook desperately wants: a young audience. In addition, numerous articles and books have been written about the great influence that TikTok has had and continues to have on youth culture and tastes in recent years.

Compared to 2020, TikTok has several hundred million more users, it is more influential, stronger. In the US, it has 100 million users, and many US officials fear that in the US elections, China will try to influence the votes of young people through the TikTok app, as Russian manipulators tried to influence in 2016.

Three years ago, Microsoft showed interest in buying TikTok, and Oracle expressed interest, but nothing came of it. Then they talked about amounts from 10 to 40 billion dollars.

Currently, the amount that analysts are putting forward if TikTok is sold will be more than $50 billion, and from the beginning many companies and investment funds will consider this amount to be huge.

One scenario is that Microsoft will make a bid if competition authorities reject the proposed deal in which the Satya Nadella-led company wanted to buy Activision Blizzard for $69 billion. However, it seems unlikely that Microsoft will be able to acquire TikTok.

They would not be approved

In all discussions about the possible sale of TikTok to Western companies, it should be borne in mind that competition authorities may oppose this, especially since TikTok is such a powerful network.

An even more complicated aspect concerns the severing of TikTok’s ties with China and ByteDance. The social network’s executives have said that TikTok is not a Chinese company, but it is clear that the ties to China are strong and cannot be completely severed, even in the case of a sale. In addition, given the economic conflict between the US and China, Beijing is expected to block any possible sale of TikTok to Western companies or investment funds.

Compared to three years ago, diplomatic and economic tensions between the US and China have increased.

So, even though TikTok is a successful company and has many assets, its takeover would create so many complications that very few companies or large investment funds would dare to try.

Another option would be for the ByteDance group to separate from TikTok and become an independent organization, but such a move would not convince Western powers and would most likely not be approved by China.

TikTok: We are a global company, not a Chinese one

“We are not a Chinese company, we are not pressured in any way by the Chinese authorities regarding data or content moderation,” a TikTok Europe official said on March 8. Faced with threats of a ban in some quarters, TikTok is trying to convince officials in the US and Europe that user data cannot find its way to Beijing. But it will be difficult, because the ties with Chinese PR are strong.

“The relationship between TikTok and ByteDance is similar to the relationship between YouTube and Google. ByteDance is the parent company, we say it’s a global company, I know some call it a Chinese company. 60% of ByteDance shares are owned by global investors such as KKR or Sequoia, investors who also own shares in other technology companies with which we compete. 20% of the shares are owned by the employees and another 20% are owned by the founders of the company,” explained Theo Bertram, Vice President of Government Relations at TikTok Europe.

Theo Bertram says there is NO WAY the Chinese authorities can get the data of TikTok users in Europe, and TikTok says it would absolutely refuse if there were such requests. The company says that Chinese authorities do not pressure either data access or content moderation. “We are an independent global company.”

TikTok officials say the app collects less personal data than other tech apps.

TikTok announced the opening of two more data centers (in Ireland and Norway).

TikTok will announce the name of a partner that will monitor how the app handles data in Europe, following the US model, where there is serious talk of banning TikTok or forcing ByteDance to sell its US operations to an American company. Both options seem extremely unlikely.

Sources: New York Times, AFP, Le Monde, Financial Times