Sale of Tik Tok on the Table
As the April 5th deadline looms, investors aim to take control and a last minute entry makes a bid
A bid led by Oracle and involving other U.S. investors, such as the U.S. venture capital firm Andreessen Horowitz, seemed set to take over the company. President Trump met today to discuss the potential sale, although details of the meeting are not yet available. However, an unexpected development emerged: a late bid from Amazon has now come into play.
The short video platform has come under fire over the past year due to its Chinese ties. The company ByteDance, operating out of China, is bound by Chinese law. In China, there is a law requiring companies to submit data to the government upon request. This has raised concerns among other nations, who view it as a security risk.
The U.S. government initially proposed a ban on April 23, 2024. This ban was to be implemented due to Congress passing the Protecting Americans from Foreign Adversary Controlled Applications Act. It allowed the company 270 days to divest. That 270-day period elapsed before President Trump extended it to the current April 5th deadline.
The two primary reasons politicians advocated for a ban in the U.S. are:
Security concerns regarding the Chinese government's legal ability to access data.
Concerns about election interference, specifically that the Chinese government could manipulate the algorithm to promote certain narratives and influence voters.
There is no evidence that any of these things are happening or would happen. However, the law in China does indeed grant the government access to data upon request.
The U.S. government is playing a role similar to that of an investment bank in this sale, with Vice President J.D. Vance overseeing the auction. It was previously reported that the government was in touch with four unnamed entities regarding the sale before Amazon threw its hat in the ring.
If successful, acquiring TikTok would further increase Amazon’s dominance in the tech industry. TikTok could integrate seamlessly into Amazon’s e-commerce business, driving sales. More importantly, it would provide the company with access to data on consumer discussions and interests. This would help Amazon in marketing. Along those lines, there could be antitrust issues with one company commanding so much of the market, which may explain the company's perceived hesitancy in placing a bid.