TikTok's Desperate Moves to Avoid US Ban: Algorithm Split and Kill Switch Offer
In a series of dramatic developments, TikTok and its parent company ByteDance are pulling out all the stops to prevent a potential ban in the United States. As the clock ticks on a congressional deadline, the social media giant is resorting to unprecedented measures to address national security concerns.
The Algorithm Split
According to Reuters, TikTok has embarked on a massive undertaking to create a separate version of its recommendation algorithm exclusively for its 170 million US users. This project, which began in late 2023, involves hundreds of engineers working to separate millions of lines of code from the main TikTok codebase.
The goal is to establish an independent US-specific algorithm, distinct from the systems used by Douyin, TikTok's Chinese counterpart. However, this herculean task is described as dirty work that could take over a year to complete. The complexity of the project raises questions about the app's future performance, as it currently relies heavily on ByteDance's Chinese engineers for updates and maintenance.
The Kill Switch Gambit
In a previously undisclosed move, ByteDance had offered the US government a kill switch option for TikTok back in 2022. This drastic measure would have given US authorities the power to shut down the platform entirely if any suspicious activities were detected. The offer also included provisions for funding data protection units and restricting ByteDance's access to US user data.
However, this proposal was reportedly rejected, with the US government ceasing substantive negotiations thereafter. The revelation of this offer highlights the lengths to which ByteDance was willing to go to maintain its presence in the American market.
Legal Battles and Uncertain Future
As the January 2025 deadline for divestiture looms, TikTok and ByteDance have taken their fight to the courts. They've filed a lawsuit challenging the constitutionality of the ban, arguing that it violates First Amendment rights. A group of TikTok creators has also joined the legal fray with a similar suit.
Both TikTok and the US Department of Justice have requested an expedited court ruling, hoping for a decision by December 6, 2024. This accelerated timeline would allow for a potential Supreme Court review if necessary.
The Buyout Conundrum
While a US buyout of TikTok could be a solution, it comes with its own set of challenges. Industry estimates suggest that TikTok's US operations could be valued at up to $100 billion, even without its core algorithm. The Chinese government has reportedly blocked ByteDance from including the algorithm in any potential sale, further complicating matters.
Despite these obstacles, several high-profile individuals have expressed interest in acquiring TikTok, including real estate billionaire Frank McCourt, former Activision CEO Bobby Kotick, and former Treasury Secretary Steven Mnuchin.
Conclusion
As TikTok fights for its survival in the US market, the outcome remains uncertain. The company's efforts to split its algorithm and previous kill switch offer demonstrate the high stakes involved. With legal battles, technological challenges, and potential buyout scenarios in play, the future of one of the world's most popular social media platforms hangs in the balance. The coming months will be crucial in determining whether TikTok can navigate these turbulent waters and maintain its presence in the United States.
Update: Wednesday May 15
The potential TikTok ban has prompted creators and brands to prepare for a possible exodus from the platform. Content creators are bracing for increased competition on alternative platforms like Instagram and YouTube, while major brands are already diversifying their marketing strategies. Companies such as e.l.f. Cosmetics and Milani Cosmetics are increasing investment in Instagram Reels and YouTube Shorts, exploring alternative apps like Flip, and redirecting sponsorship budgets. The situation has sparked debates about free speech and creative expression, with some creators, like Nadya Okamoto, starting petitions against the ban. This uncertainty underscores the volatile nature of building careers and marketing strategies on social media platforms, emphasizing the need for diversification in the digital age.
Update: Wednesday May 01 22:00
ByteDance is reportedly considering withdrawing TikTok from the US market if legal efforts to prevent a ban fail, rather than selling the app. This decision stems from several factors, including the importance of TikTok's core algorithms to ByteDance's overall technology portfolio, challenges in valuing the company, and Chinese regulatory hurdles for selling algorithms to foreign entities. While the US market accounts for about 25% of TikTok's revenue, it represents only 5% of ByteDance's daily active users. The company appears prepared to prioritize protecting its core technology over maintaining its US presence, potentially reshaping the social media landscape for 170 million American users.