ByteDance investors could win in TikTok sale says US lawmaker amid pressure to ban app over China espionage concerns

‘It would be in the financial interest of ByteDance’s investors to effectuate a forced sale,’ said congressman Mike Gallagher
Efforts to remove Chinese corporate influence over social-media platform is back on US political agenda in an election year

ByteDance

Bloomberg

Published: 3:31am, 18 Mar 2024

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Investors in TikTok’s Chinese parent company stand to benefit if it sold the app because divestment would remove a source of uncertainty, a US Republican lawmaker said.

“It would be in the financial interest of ByteDance’s investors to effectuate a forced sale,” congressman Mike Gallagher, who spearheaded a House-passed bill aimed at making the company divest TikTok to allow its continued operation in the United States, said on CBS’ Face the Nation on Sunday.

Efforts to remove Chinese corporate influence over the popular social-media platform is back on the political agenda in an election year.

At least two US senators voiced support in principle for the bill on Sunday, though it faces a slower process in the chamber after winning bipartisan backing in the House last week on concern over Chinese government influence on the American public.

The headquarters of ByteDance, the parent company of video sharing app TikTok, in Beijing. Photo: AFP

Key senators have expressed constitutional reservations about banning the platform. Gallagher, who chairs a House committee looking into the US-China strategic competition, argued on Face the Nation that a forced sale “absolutely could” happen before the November elections.

“I think the user experience on the app would improve and you wouldn’t have this concern over being propagandised, the opaque algorithm influencing the information you see,” he said. “That would go away, so I imagine it would actually increase in value.”

While US President Joe Biden has said he would sign the House bill on TikTok, National Security Council spokesman John Kirby said on Sunday “we don’t want to see it banned”.

“We do want to see ByteDance no longer in control of that application,” he said on ABC’s This Week.

Can ByteDance have its TikTok cake and eat it too?

Senator Mike Rounds, a Republican from South Dakota, said the best solution would be for ByteDance “to allow for American ownership” of TikTok.

“If not, then we’re probably going to have to eliminate it from the platforms,” he said on CNN’s State of the Union.

Senator Bill Cassidy, a Republican from Louisiana, gave the House bill a qualified endorsement.

“I’d like to see the final language, but I’m certainly predisposed to vote for it,” he said NBC’s Meet the Press.

Former US Treasury Secretary Steven Mnuchin said on Thursday he is targeting a purchase of TikTok from its parent, telling CNBC he has spoken to potential co-investors about acquiring the app.