The TikTok law kicks off a new showdown between Beijing and Washington. What’s coming next?

WASHINGTON — TikTok is gearing up for a legal battle against a US law that would force the social media platform to cut ties with its China-based parent company, a move that is almost certain to be backed by Chinese authorities as the bitter rivalry between the US and China threatens a company’s future. wildly popular way for young people in America to connect online.

Beijing has signaled that TikTok must fight what it has called a “robbery” act by US lawmakers “to take whatever good they have from others.” Should a legal challenge fail, observers say Chinese authorities are unlikely to allow a sale, a move that could be seen as a surrender to Washington.

Beijing may not want US action against the popular short video platform to set a “bad precedent,” said Alex Capri, a senior lecturer at the National University of Singapore and research fellow at the Hinrich Foundation. “If Beijing capitulates to the US, where does that end?”

The legislation signed by US President Joe Biden this week could allow Washington to expand its reach to target other China-related apps, such as popular e-commerce platform Temu, and encourage US allies to follow suit, said Hu Xijin, a former editor. -in-chief for the party newspaper Global Times.

With 170 million American users, TikTok “should have more courage to fight to the end and refuse to surrender,” Hu, now a political commentator, said on Chinese social media on Wednesday.

TikTok vowed to challenge the new US law, which requires Beijing-based parent company ByteDance to divest its stakes within a year to avoid a ban. The company has characterized the law as an infringement on the freedom of expression of its users, most of whom use the app for entertainment.

“We believe that the facts and the law are clearly on our side, and that we will ultimately prevail,” the company wrote on the social platform X.

The battle over TikTok has increased tensions between the US and China, with both vowing to protect their economic and national security interests. U.S. lawmakers are concerned that Chinese ownership of the app could allow Beijing to exert undue influence in the U.S., especially over young minds. The law followed a series of successes by Washington in curbing the influence of Chinese companies through bans, export controls and forced divestments. This led to protests from Beijing that the US is bent on suppressing China’s rise through economic coercion.

The U.S. has forced other Chinese companies to divest before, including in 2020, when Beijing Kunlun, a Chinese mobile video game company, agreed to sell gay dating app Grindr after receiving a federal order. But TikTok, created by a Chinese company solely for the overseas market and a testament to the country’s technological power on the global stage, is a high-profile business that Beijing doesn’t want to lose.

National dignity is at stake and could “take precedence over the financial interests of ByteDance investors,” including global investors who own 60% of the company, said Gabriel Wildau, director of New York-based consulting and advisory firm Teneo .

A legal challenge from the company is expected to lean on First Amendment concerns and could drag on for years. Beijing is betting on a legal victory, analysts say.

What to do if TikTok doesn’t gain the upper hand is likely still being discussed with China’s leaders, said Dominic Chiu, an analyst at Eurasia Group. President Xi Jinping, who will have to sign off on whether to allow or ban the sale, is unlikely to have made a final decision yet, Chiu said.

Fortunately for Xi, there is no urgency for Beijing to decide, said Sun Yun, director of the China program at the Washington-based Stimson Center. A lot of things could change, she said.

If lawmakers get their wish and a sale takes place, it will likely be a challenging and messy process for TikTok, which would have to separate its U.S. operations from everything else.

First, the price tag for TikTok’s U.S. operations — which is unknown — is expected to be high enough to severely limit the pool of investors and companies that can afford it. Some investors – including former Treasury Secretary Steve Mnuchin – have already positioned themselves as potential buyers of a US version of TikTok. ByteDance, a privately held company, is valued at $220 billion, according to market tracker Pitchbook.

And there is uncertainty about what would happen to TikTok’s algorithm, the secret sauce that gives users short videos based on their interests and has contributed to the platform’s status as a cultural juggernaut.

ByteDance should no longer have control over the algorithm of an American spin-off of TikTok. Many experts believe that Chinese authorities would block any sales of the technology that populates people’s TikTok feeds under export rules revised in 2020, when then-President Donald Trump tried unsuccessfully to ban TikTok through an executive order which was blocked by federal courts.

Some, including Mnuchin, have said TikTok needs to be rebuilt in the US using new technology. But it’s unclear what that might look like, or how well it can reproduce the kind of video recommendations users have become accustomed to.

Robin Burke, a professor of information science at the University of Colorado Boulder, says some aspects of the algorithm may be replicated by industry insiders. But he also noted that there are areas where TikTok has an edge over its competitors and duplication can be a challenge.

“TikTok has all the experience, they have all the data,” Burke said. “I think it’s unlikely that an American company – if it doesn’t inherit the technology from the parent company – would be able to build something equivalent. Certainly not right away.”

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AP journalist Dake Kang contributed from Beijing.