Beijing, 25 March 2023 (GNP): The Chinese owned video app TikTok is now again under imminent threat, three years after the Trump administration warned to outlaw it if its owner refused to sell it to American investors.
Shou Chew, the CEO of TikTok, spoke before US senators on Thursday, several of them want the app banned in the US as they believe it poses a threat to national security.
After Chew was questioned in Washington, the demand for a sale seemed to have been even stronger.
As per analysts and legal experts, an outright sale isn’t possible as the Chinese government deems TikTok’s technology as critical and has taken steps since 2020 to ensure it can reject any sale by its Beijing based owner, ByteDance.
Algorithms for content recommendation are among the cutting-edge technologies that the Chinese government views as crucial to its national interest.
Chinese officials suggested in December stiffening the regulations governing the sale of such technology to global customers.
Who oversees TikTok’s algorithms and the huge amounts of information assembled from the 150 million Americans using the app each month is at stake.
In reply to the Biden administration’s demand, China declared on Thursday that it would “firmly” resist a forced sale of TikTok.
Securing a license and consent from the Chinese government would be necessary in order to sell or divest TikTok since it would entail the transfer of technology, said a spokeswoman for the commerce ministry.
Brock Silvers, chief investment officer for Kaiyuan Capital said, “Beijing will have no say in the US decision to mandate the sale of TikTok, but it will retain the ultimate approval authority over such a sale”.
“It also seems extremely unlikely that Beijing will accept any deal that removes TikTok’s algorithms from its direct control and regulatory authority,” he continued.
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The algorithms of TikTok, which keep users hooked on the app, are said to be the secret to its success.
According to user behavior, the algorithms make recommendations, pushing users towards content they genuinely enjoy and want to watch.
In August 2020, when the Trump administration threatened to ban TikTok unless it was sold, Chinese officials included algorithms for the first time to the banned list of technologies.
The company is now once again involved in a geopolitical conflict between Washington and Beijing.
Alex Capri, research fellow at the Hinrich Foundation, claimed that the TikTok hearings in the US “mark the beginnings of a regulatory meat-grinder facing all Chinese tech companies”.
This week, a top representative of China’s ministry of traditional and digital media paid a visit to Bytedance’s offices.
According to a statement from the ministry published on its website, he asked the company to enhance the use of “recommendation algorithms” to promote “positive energy” and maximize the review of online content.
The visit demonstrates Beijing’s commitment to maintain strict control over its most influential internet companies.