TikTok’s U.S. Operations: Sale to X or ‘Pure Fiction’?

• TikTok has denied reports of a potential sale of its U.S. operations to Elon Musk’s X. The denial comes amidst a U.S. law requiring Chinese divestment from TikTok.
• The U.S. government alleges TikTok allows Beijing to collect user data and spread propaganda.
• The potential sale and its implications remain speculative as the law goes into effect.

TikTok, the globally recognized video-sharing platform, has recently dismissed reports suggesting a potential sale of its U.S. operations to billionaire Elon Musk’s social media platform X as pure fiction. This dismissal comes at a time when the company is grappling with an American law that mandates imminent Chinese divestment. The law, passed by the U.S. Congress last year, stipulates that ByteDance, the Chinese owner of TikTok, must either sell its platform or shut it down. This law is set to be implemented on Sunday, just a day before President-elect Donald Trump assumes office.

The report of the potential sale, first published by Bloomberg News, cited anonymous sources familiar with the matter. It proposed a scenario being discussed in Beijing where X would acquire TikTok from ByteDance and merge it with the platform formerly known as Twitter. However, a TikTok spokesperson told AFP, We cannot be expected to comment on pure fiction. The report estimated the value of TikTok’s U.S. operations to be between $40 billion and $50 billion.

Musk’s Role and U.S. Government’s Allegations

The potential sale raises questions about how Musk, currently the world’s wealthiest person, could execute the transaction, or if he would need to sell other assets. Musk, a close ally of Trump, is expected to play an influential role in Washington in the coming four years. He also runs electric car company Tesla, which has a major factory in China and counts the country as one of the automaker’s biggest markets.

The U.S. government alleges that TikTok allows Beijing to collect data and spy on users and is a conduit to spread propaganda. China and ByteDance strongly deny these claims. TikTok has challenged the law, taking an appeal all the way to the U.S. Supreme Court, which heard oral arguments on Friday. At the hearing, a majority of the conservative and liberal justices on the nine-member bench appeared skeptical of arguments by a lawyer for TikTok that forcing a sale was a violation of First Amendment free speech rights.

The Road Ahead and Historical Precedents

Bloomberg characterized Beijing’s consideration of a possible Musk transaction as still preliminary, noting that Chinese officials have yet to reach a consensus on how to proceed. Trump has repeatedly threatened to enact new tariffs on Chinese goods, which would expand a trade war begun in his first term and which was largely upheld, and in some cases supplemented, by outgoing President Joe Biden.

The situation is reminiscent of the 1980s case where the Palestine Information Office in Washington was closed because it was backed by the PLO, an organization officially designated as a terrorist group. The lawyer arguing on behalf of TikTok, Andrew Pincus, stated that the law before the court is unprecedented and its effect would be staggering. He added that seeing foreign ownership alone as criteria for forced divestiture would be a pretty shocking change here, citing other foreign-owned media companies such as Politico, Al Jazeera, and the BBC.

The case is likely to reach the U.S. Supreme Court, regardless of the decision of the trio of judges who will decide the case in the coming weeks or months. Sarah Kreps, director of Cornell’s Tech Policy Institute, said, After listening to the oral arguments, I am more convinced that this case will end up in the Supreme Court.

In conclusion, the potential sale of TikTok’s U.S. operations to Elon Musk’s X is still a matter of speculation. The situation is complex, with legal, political, and economic implications. As the law requiring Chinese divestment goes into effect, the fate of TikTok in the U.S. hangs in the balance. The coming weeks will be crucial in determining the future of the popular video-sharing platform in the U.S. market.