President Donald Trump issued an executive order on Friday requiring ByteDance to complete the sale of the US operation of TikTok within 90 days. The company is in talks with Microsoft over a deal.
It has angered users and observers in China as the internet group bow to US pressure at a time of growing tensions between Washington and Beijing.
“ByteDance will never be able to get up again after bending the knee,” wrote a user of the Chinese service Weibo, similar to Twitter. “We have no sympathy for cowards. “
Analysts said the U.S. government’s demand put ByteDance in a difficult position as it sought to negotiate a deal for its U.S. company without alienating its audience in China. Douyin – TikTok’s brand name in China – had 613 million active users in July, up from 20 million three years ago.
“ByteDance has not satisfied either China or the United States,” said a Beijing-based executive from a rival internet company. ByteDance “runs the risk of under-selling TikTok and losing popularity in its home country.”
Beijing-based ByteDance has strived to adapt its business model to international markets as it has grown outside of China.
Like many private Chinese companies, ByteDance has a Communist Party committee headed by an executive who is responsible for ensuring that all text and video content conforms to restrictions set by the party, such as avoiding politically sensitive topics. It employs an army of censors who help filter content considered taboo.
But TikTok, which encompasses ByteDance’s operations outside of China, enjoys greater autonomy and is largely run by non-Chinese staff. TikTok named former Disney executive Kevin Mayer as chief executive in May. The app also prevents users in mainland China from accessing its content, which is not controlled to the same level as in China.
ByteDance has been a victim of Beijing in the past. He shut down his popular Neihan Duanzi app in 2018 after vulgar jokes and videos on the platform angered Chinese regulators.
Analysts said ByteDance’s announcement last week that it could legally challenge a separate executive order from the Trump administration was in part intended to show the Chinese public that it was fighting U.S. stocks. The company has said it wants to ensure that “the rule of law is not sidelined” and that its users are “treated fairly”.
But “the threat of legal action suggests that ByteDance management is panicking,” said Zhuang Bo, analyst at TS Lombard.
However, other commentators have noted that ByteDance probably has few options but to sell its business given the level of pressure from Washington, which raises the possibility of further backlash in China.
“Selling the US Tiktok operation at a reasonable price is the only choice for ByteDance,” Zhu Ning, a professor at the Shanghai Advanced Institute of Finance, wrote in an article posted last week.