The Chinese Government has expressed disapproval of the U.S. Government’s efforts to force the sale of TikTok, citing bullying behavior and disruption of normal business activities. The U.S. President Joe Biden has signed off on a bill that compels TikTok to separate from its Chinese ownership, with the company now exploring scenarios for a potential acquisition by a U.S. provider. However, China has vowed to oppose the full sell-off of the app, arguing that it could harm the nation’s reputation in international trade. One key concern is the potential impact on TikTok’s recommendation algorithm, which is considered the app’s secret sauce.
TikTok’s algorithm is a critical aspect of its value, as it can quickly detect user interests in real-time, providing a more engaging stream of videos. However, under China’s export-control rules, the sale of systematic algorithms is regulated by the Chinese Government, which could mean that even if TikTok is sold, its back-end systems may not be included. This could significantly reduce the overall value of the app, which is currently estimated to be worth between $20 billion and $100 billion. The valuation depends on what is included in the package, as a TikTok without its algorithm is seen as a riskier investment proposition.
There are concerns about TikTok’s algorithm after reports that it included parameters intended to suppress posts deemed “too ugly, poor, or disabled for the platform.” While TikTok officials clarified that these parameters were only used in the Chinese version of the app and not in TikTok itself, the app’s ability to detect specific visual elements raises questions about its impact. The algorithm has the capacity to identify traits and highlight them to moderators for further action, which could have significant implications for user experience. The question arises about whether it is ethical for a platform like TikTok to leverage such elements to keep users engaged.
The full listing of TikTok’s algorithmic parameters remains a secret, raising concerns about how its feed maintains its compulsion. If TikTok is to be sold, the fate of its algorithm will be a crucial aspect of its future. Given the potential risks and ethical considerations surrounding the algorithm’s capabilities, the decision on whether to include it in the sale package will be important. The outcome of the ongoing discussions between TikTok, ByteDance, and potential U.S. acquirers will likely shape the app’s future and its value proposition in the market. As the situation continues to unfold, the implications for TikTok’s operations and user experience remain uncertain.