Zhou Xuzhi, CEO of TikTok./Reuters Yonhap News
Immediately after US President Joe Biden signed a bill forcing the sale of TikTok’s US business on the 24th (local time), TikTok CEO Zhou Xuzhi said, “We’re not going anywhere.”
In a video posted that day, CEO Zhou said, “The facts and the Constitution are on our side, and we expect to win again.” Previously, TikTok faced the risk of being kicked out of the US several times, but each time it avoided the crisis by using the ‘freedom of expression’ guaranteed by the First Amendment to the US Constitution like a shield. This can be interpreted as an intention to raise legal objections to the measure.
The ‘TikTok Ban Act’, which came into effect with the signature of President Biden, requires the sale of TikTok’s business in the United States within 270 days. A 90-day extension can be obtained once under the authority of the President, but if the sale is not made even after that, TikTok will be completely expelled from the app market in the United States. Apps already installed on personal smartphones can be used for now, but they will no longer be able to update security patches and will eventually disappear from the market.
The tech industry believes that if TikTok becomes involved in litigation related to the bill, it will take a long time for the law to actually take effect. The New York Times (NYT) said the day before, “The bill has been passed, but now the really hard part begins,” adding, “This bill may face problems like legal battles and future Chinese hostility, or it could. be difficult to find a buyer.”
In fact, TikTok plans to enter into an immediate legal battle under the argument that the bill violates the ‘freedom of expression’ guaranteed by the First Amendment to the US Constitution. In addition, TikTok’s parent company, ByteDance, has a corporate value of $225 billion (about 308 trillion won), and the sale price of its US business is expected to exceed tens of billions of dollars. The NYT analyzed that there is a possibility that no buyer will appear, saying, “Buyers who can afford this price are limited to large corporations, and the acquisition of large technology companies such as Meta or Google is very likely be blocked as it violates anti-monopoly laws.” A tech industry official said, “The Chinese government, which strongly opposes the sale of TikTok, may propose various retaliatory measures.”
However, while TikTok is engaged in a legal battle with the US government, competitors Google and Meta are expected to benefit. The Washington Post on the 24th evaluated, “(The plan to ban TikTok) is the biggest gift the US Congress has given to Big Tech in years,” and added, “The public opinion ‘demonized’ that TikTok dangerous is, in the Meta case, the biggest competitor he has faced so far “We will succeed in neutralizing a strong opponent.” In fact, Instagram, which is run by Meta, and Google’s YouTube were on the defensive to the extent that they quickly launched a service that copied TikTok’s ‘short form video’ as they lost users after TikTok gain popularity. As more people leave TikTok, the number of people flowing to similar services from Google and Meta will naturally increase.
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