TikTok Plans Legal Fight If US Divestment Bill Becomes Law (1)

TikTok intends to exhaust all legal challenges before it considers any kind of divestiture from Chinese parent company ByteDance Ltd. if the latest US legislation targeting the app becomes law, according to people familiar with the matter.

A sale of the viral video app is considered to be the last resort for ByteDance, said the people, who asked not to be identified discussing private matters. A divestiture would also require approval by the Chinese government, which said last year that it would firmly oppose a forced sale. No plans are final, and would depend on how the legislation progresses, the people said.

TikTok Chief Executive Officer Shou Chew went to Capitol Hill on Tuesday to lobby against a bill that would force the app’s Chinese parent to sell it or face a ban in the US. The bill was advanced by a key committee last week, and to move forward, the bill would need to clear a floor vote in the US House of Representatives on Wednesday — the furthest any federal TikTok legislation has gotten.

The company will continue making its case to members in the Senate, where the existing bill from the House has no co-sponsor, said one of the people familiar with the matter.

WATCH: Federal Communications Commission Commissioner Brendan Carr says Tiktok is a national security threat and should not be controlled by ByteDance.

Source: Bloomberg

A TikTok spokesperson declined to comment on the company’s plans. The legislation “has a predetermined outcome: a total ban of TikTok in the United States,” the spokesperson said.

The company discussed the possibility of separating from ByteDance in March 2023, Bloomberg reported at the time. Such a move would have been pursued only if the company’s existing proposal with US national security officials didn’t get approved. There hasn’t yet been a public resolution on the national security review undertaken by the Biden administration.

“In recent years, although the United States has never found evidence that TikTok threatens U.S. national security, it has never stopped suppressing TikTok,” Chinese Ministry of Foreign Affairs spokesman Wang Wenbin said Wednesday. “This practice of bullying — if you cannot win in fair competition — disrupts the normal business activities of enterprises, damages the confidence of international investors” and “undermines the normal international economic and trade order, which will eventually backfire on America itself.”

Read More: TikTok Focuses on Senate as House Barrels Toward Divestment Vote

(Adds comments from China’s foreign ministry in last paragraph.)

--With assistance from Qianwei Zhang, James Mayger and Allen Wan.

To contact the reporters on this story:
Alex Barinka in Los Angeles at abarinka2@bloomberg.net;
Zheping Huang in Hong Kong at zhuang245@bloomberg.net

To contact the editors responsible for this story:
Jillian Ward at jward56@bloomberg.net

Robin Ajello

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