ByteDance Investors Could Stand to Gain in TikTok Sale, US Lawmaker Claims

By Leira Aquino

Mar 17, 2024 08:48 PM EDT

US Rep. Mike Gallagher speaks to reporters. Gallagher, who champions a bill passed by the House calling for ByteDance to divest TikTok, argues that investors of the parent company could win from the sale.
(Photo : Chip Somodevilla/Getty Images)

Investors in TikTok's Chinese parent company, ByteDance, could potentially see gains if the app is sold, as divestment would alleviate uncertainties surrounding its future, according to statements made by a Republican lawmaker from the United States (US).

Rep. Mike Gallagher, who led a House-passed bill advocating for the company to divest TikTok, highlighted the financial interests at play during an appearance on CBS's Face the Nation on Sunday.

Gallagher: Forced TikTok Sale Could Benefit ByteDance Investors

"It would be in the financial interest of ByteDance's investors to effectuate a forced sale," the lawmaker claimed

The issue of reducing Chinese corporate influence over TikTok has resurfaced in the political landscape, particularly in the context of an election year. 

While the bill has garnered bipartisan support in the House, it faces a more deliberative process in the Senate. Key senators have expressed constitutional concerns about outright banning the platform.

Gallagher, who chairs a House committee focusing on US-China strategic competition, emphasized the possibility of a forced sale occurring before the November elections, stating that it "absolutely could" happen. 

"The closer we get to an election, the risk just gets greater and greater," he said.

He also suggested that such a move could lead to an enhanced user experience on the app and mitigate concerns about algorithmic influence over information.

The House approved a bill last week with a vote of 352-65, mandating parent company ByteDance to divest TikTok within 165 days or face a potential ban of the app in the U.S. Now, the Senate is anticipated to consider the bill, although its approval there is forecasted to face greater uncertainty.

President Joe Biden has indicated his readiness to sign the House bill if it reaches his desk.

READ NEXT: American Companies Brace for Chinese Retaliation After TikTok Ban

Lawmakers Discuss TikTok's Future Amid Bipartisan Concerns

Echoing sentiments from fellow Republicans, Senator Mike Rounds of South Dakota proposed American ownership of TikTok as the ideal solution. 

Alternatively, he suggested that the platform might need to be removed from app stores if ByteDance doesn't comply.

Senator Bill Cassidy from Louisiana expressed conditional support for the House bill, pending a review of its final language. Additionally, former US Treasury Secretary Steven Mnuchin revealed his intentions to pursue the purchase of TikTok from its parent company.

Gallagher emphasized that the bill isn't aimed at banning TikTok but rather at separating the app from entities affiliated with the Chinese Communist Party. 

National Security Council spokesman John Kirby echoed this sentiment, stating, "We don't want to see it banned," underlining the goal of removing ByteDance's influence over TikTok.

TikTok, meanwhile, has strongly opposed the proposed legislation, arguing that it amounts to a ban despite lawmakers' assertions to the contrary.

"This bill is an outright ban of TikTok, no matter how much the authors try to disguise it," it said. 

The video-sharing platform boasts 170 million users in America. The company argues that the bill will infringe upon the First Amendment rights of its vast user base and will strip 5 million small businesses of a platform they depend on for growth and job creation.

READ MORE: TikTok Ban Looms: CEO Shou Chew Urge Users to Protect the Platform Amid Divestiture Threat

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