What’s next for the US app?

Washington:

TikTok said Wednesday it will fight a new U.S. law that orders the popular video-sharing app to separate from its Chinese owners or face an outright ban in the United States.

Here’s what could happen next with one of the most downloaded apps in the world.

What does the law say?

The bill signed by President Joe Biden gives TikTok 270 days (about nine months) to find a non-Chinese buyer or face a ban in the United States. The White House can extend the deadline only once for 90 days.

During this period, the app would continue to operate for around 170 million users in the US.

What will happen in the courts?

Tiktok says it will fight the law in US courts, saying it seriously violates free speech rights.

The company has some reason to believe it will prevail; in 2020, the company survived a similar order from then-President Donald Trump.

TikTok filed a lawsuit challenging the ban, and a federal judge temporarily blocked Trump’s effort, saying the reasons for banning the app were likely exaggerated and that free speech rights were in danger.

Still, the Trump administration tried to broker a deal in which data server company Oracle and supermarket giant Walmart would buy a joint stake in TikTok, but those talks went nowhere.

The new effort signed by Biden is designed to overcome the same legal headaches, and some experts believe the US Supreme Court could be open to allowing national security considerations to trump protections of free speech, although this is far from certain.

Trump, who is running for president against Biden, now says he opposes the possible ban as it would benefit rival Meta, owner of Instagram and Facebook.

Who will buy TikTok?

Finding a buyer for TikTok won’t be an easy task, given the resources needed to come home to one of the most popular apps in the world.

The usual Big Tech suspects like YouTube’s Meta or Google will likely be blocked from acquiring TikTok due to antitrust concerns. They already dominate the social media market by a lot.

Even Microsoft, owner of the more niche LinkedIn and now the world’s largest company by market capitalization, would face tough scrutiny from competition regulators.

Oracle could be interested in trying again to enter into a deal.

Since its first attempt during the Trump administration, the Larry Ellison-controlled company has helped TikTok devise a way to satisfy U.S. national security concerns in a scheme called Project Texas, which essentially turns U.S. data into a stand-alone company, but still owned by ByteDance. .

Former Treasury Secretary Steven Mnuchin said earlier this month that he was assembling a team of investors to propose a bid for the company, but he has little experience in technology and his ambition was considered absurd by observers.

What if no one buys?

Barring any ruling from the courts, the deadline to sell Tiktok would be approximately one year from April 24, if the 90-day extension is used.

From that time on, TikTok would no longer be available in the US Apple or Android app stores and, more importantly, software updates and bug fixes would no longer occur.

In other words, Tiktok would slowly disappear, with Bytedance unable to update the app, although it could decide to shut it down completely.

What does China say?

In the battle over the future of TikTok in the US, China has come to the defense.

Beijing does not want a precedent to be set where a Chinese company is strong-armed into selling one of its most valuable assets, including an algorithm that is the envy of its competitors.

There are also fears that an alarming precedent is being set and that other Chinese companies will face a similar fate in the future.

The dispute was discussed in a phone call between Biden and Chinese President Xi Jinping earlier this month.

Who will benefit?

The clear winners from an eventual TikTok ban would be Meta and Google, who have launched their own TikTok imitators: Meta’s Reels and YouTube Shorts.

Both alternatives have been gaining ground in the US market, at a time when Tiktok seems to be stagnating, perhaps affected by doubts about its future.

(Except the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)