TikTok Activates Plan B As China New Law Could Jeopardise The Acquisition Talk!

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The acquisition of TikTok is riddled with more twists and turns than your average thriller flick!

As if the deal wasn’t already in enough jeopardy with the constant pressure it had been facing from the U.S, that it has now managed to land into another huge pothole!

China, which is ByteDance’s origin country, has reportedly further complicated the job of selling TikTok to an American company. It has introduced new rules that can allow Beijing to veto any potential deal that is currently in talks.

On Friday, the Chinese government revised rules which govern the sale of certain kinds of technology to foreign buyers. The list which was last updated or modified in the year 2008 now includes – data processing, speech and text recognition. Interestingly, it is a similar technology that the popular short-form video app TikTok relies upon.

Even though neither the name ByteDance nor TikTok was thrown around, China’s Ministry of Commerce and Ministry of Science and Technology made it very clear that this is a ‘tit-for-tat’ move against the U.S government in their statement where they mentioned these changes were meant to ‘protect national security.’

Thus, now it is very much likely that ByteDance will be required to obtain the permission of the Chinese government before it can officially sell TikTok to either the Microsoft-Walmart duo or Oracle or any other coalition of foreign investors.

The Plan B of TikTok

TikTok has quickly realised the severity of the situation that could permanently shut the door for major marketers outside China. Hence, Tiktok didn’t waste much time and has started preparing a contingency plan aka ‘Plan B’.

According to a media report, in a memo this week, the popular short-form app company has asked its engineers to draw up plans for shutting down the app and all of its operations in the United States.

It has also implemented a hiring freeze in America for most of its open positions and is bringing on board only a mere 5% of of the staff it initially planned to recruit.

ByteDance which is the parent company of TikTok is also ramping up its separate Plan B. They are busy trying to find a way for TikTok U.S. employees and vendors to be compensated in the event of a shutdown.

As of right now, all the preparations have been reported to be a part of a back-up plan only. This is because, insider sources under the condition of anonymity, have made it known that they are still confident about the acquisition going through and that they will definitely be able to find a resolution. as they are confident about the acquisition.

China’s Tit For Tat Move

China’s overwhelming desire to suddenly update their technology transference laws to protect homegrown technology is definitely aimed to hurt America. The latter for long has been trying to force ByteDance’s hand into selling the popular short-form video app to an American company but the new Chinese law could make it really difficult for the transaction to go through.

Bottom line, if the technology that supports the framework of TikTok cannot be sold, then it is quite obvious that nobody is going to want to buy it in the United States or any other country.

It would be interesting to see what strategy ByteDance employes to escape these international bureaucracies and make sure Americans still have access to their dose of an endless scroll of dancing videos, lip-syncing routines and comedy sketches.

Who do you think will have the last laugh – US president Donald trump, China president Xi Jinping or ByteDance CEO Zhang Yiming? Do let us know your views in the comment section below.


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