TikTok’s parent firm, ByteDance, has denied new reports claiming its plans to sell the company after the United States passed the TikTok Ban Bill, reported BBC on Friday.
The company issued the statement on Toutiao, one of its Chinese media platforms, rejecting the report by an American news website, The Information.
The website, in its news report, mentioned that ByteDance is exploring scenarios for selling TikTok’s US business without the algorithm that recommends videos to TikTok users.
American President Joe Biden, earlier this week, signed into law a bill that banned TikTok in the country if its owner failed to divest the popular short video app over the next nine months to a year.
ByteDance, on the other, said it would prefer to shut down its loss-making app rather than sell it if it has exhausted all legal options to fight legislation to ban the platform from app stores in the US, four sources told Reuters.
The algorithms TikTok relies on for its operations are deemed core to ByteDance’s overall operations, which would make a sale of the app with algorithms highly unlikely, said the sources close to the parent.
TikTok accounts for a small share of ByteDance’s total revenues and daily active users, so the parent would rather have the app shut down in the U.S. in a worst case scenario than sell it to a potential American buyer, they said.
A shutdown would have limited impact on ByteDance’s business while the company would not have to give up its core algorithm, said the sources, who declined to be named as they were not authorised to speak to the media.