Zinger Key Points
- TikTok has sued the U.S. government over a bill asking it to either divest or be banned.
- The company also admitted that the Chinese government won’t let it sell the algorithm.
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TikTok has filed a lawsuit against the US government, refusing to comply with the new law that requires the sale of its popular video-sharing app. The company has made it clear that it will not be able to sell its algorithm, which is the primary concern of the US government.
What Happened: TikTok parent ByteDance Ltd. has taken a firm stance against the law signed by President Joe Biden last month, which demands the divestment of TikTok by Jan. 19, or the app will be banned in the US.
The company has filed a legal challenge, contesting the law’s constitutionality, arguing that it violates the First Amendment and represents an illegal punishment without due process or a presidential finding that the app is a national security threat.
ByteDance has also made it clear that it will not be seeking a buyer for TikTok as the deadline approaches.
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In its petition, the company also admitted that Xi Jinping’s Communist Party of China would not allow it to sell the algorithm that powers TikTok.
"The Chinese government has made clear that it would not permit a divestment of the recommendation engine that is a key to the success of TikTok in the United States," the company said in its court filing.
Even if the company is forced to sell the app, it would happen without the algorithm that has played a key role in making it addictive enough to be sued by New York City and the state of Utah.
Why It Matters: The U.S. government has claimed that the TikTok algorithm poses a national security threat, which the Chinese government could utilize for mass influence operations in the U.S.
Earlier, TikTok CEO Shou Zi Chew warned that banning the app could take "billions of dollars" out of creators' pockets and put over 300,000 U.S. jobs at risk.
Meanwhile, European Commission chief Ursula von der Leyen suggested that a TikTok ban in the EU is a possibility.
On the other hand, Elon Musk has voiced concerns about the ban after a user pointed out that it could set a "precedent that the government can ban any app."
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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