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TikTok is now disputing a Reuters report that claims the short-video app is cloning its algorithm to potentially offer a different version of the app, which might degrade over time, just for US users.

Sources "with direct knowledge" of the project—granted anonymity because they're not authorized to discuss it publicly—told Reuters that the TikTok effort began late last year. They said that the project will likely take a year to complete, requiring hundreds of engineers to separate millions of lines of code.

As these sources reported, TikTok's tremendous undertaking could potentially help prepare its China-based owner ByteDance to appease US lawmakers who passed a law in April forcing TikTok to sell its US-based operations by January 19 or face a ban. But TikTok has maintained that the "qualified divestiture" required by the law would be impossible, and on Thursday, TikTok denied the accuracy of Reuters' report while reiterating its stance that a sale is not in the cards .

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TikTok and its owner ByteDance today sued the federal government to block the "Foreign Adversary Controlled Applications" law that would prohibit TikTok in the US if the company isn't sold to a non-Chinese firm. The complaint in the US Court of Appeals for the District of Columbia Circuit alleges that the law is unconstitutional and asks for a court order prohibiting enforcement.

TikTok and ByteDance say the law "would allow the government to decide that a company may no longer own and publish the innovative and unique speech platform it created. If Congress can do this, it can circumvent the First Amendment by invoking national security and ordering the publisher of any individual newspaper or website to sell to avoid being shut down."

The law will "silenc[e] the 170 million Americans who use the platform to communicate in ways that cannot be replicated elsewhere," TikTok and ByteDance alleged.

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Former US Treasury Secretary Steven Mnuchin is reportedly assembling an investor group to buy TikTok as the US comes closer to enacting legislation forcing the company to either divest from Chinese ownership or face a nationwide ban.

"I think the legislation should pass, and I think it should be sold," Mnuchin told CNBC Thursday. "It’s a great business, and I’m going to put together a group to buy TikTok."

Mnuchin currently leads Liberty Strategic Capital, which describes itself as "a Washington DC-based private equity firm focused on investing in dynamic global technology companies."

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On Wednesday, the US House of Representatives passed a bill with a vote of 352–65 that could block TikTok in the US. Fifteen Republicans and 50 Democrats voted in opposition, and one Democrat voted present, CNN reported .

TikTok is not happy. A spokesperson told Ars, "This process was secret and the bill was jammed through for one reason: it's a ban. We are hopeful that the Senate will consider the facts, listen to their constituents, and realize the impact on the economy, 7 million small businesses, and the 170 million Americans who use our service."

Lawmakers insist that the Protecting Americans from Foreign Adversary Controlled Applications Act is not a ban. Instead, they claim the law gives TikTok a choice: either divest from ByteDance's China-based owners or face the consequences of TikTok being cut off in the US.

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For months, some of the biggest tech companies have been wrapped up in discussions with the European Commission (EC), seeking feedback and tweaking their plans to ensure their core platform services comply with the Digital Markets Act (DMA) ahead of that law taking force in the European Union tomorrow.

Under the DMA, companies designated as gatekeepers—Alphabet/Google, Amazon, Apple, ByteDance, Meta, and Microsoft—must follow strict rules to ensure that they don't engage in unfair business practices that could limit consumer choice in core platform services. These include app stores, search engines, social networking services, online marketplaces, operating systems, web browsers, advertising services, cloud computing services, virtual assistants, and certain messaging services.

At its heart, the DMA requires more interoperability than ever, making it harder for gatekeepers to favor their own services or block other businesses from reaching consumers on their platforms.

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One of TikTok's senior-most female executives, Katie Ellen Puris, is suing TikTok and its owner ByteDance, alleging wrongful termination based on age and sex discrimination.

In her complaint filed Thursday, Puris accused ByteDance chairman Lidong Zhang of aggressively forcing her out of the company because she "lacked the docility and meekness specifically required of female employees." She also alleged experiencing retaliation after reporting sexual harassment to the company.

Puris joined TikTok in December 2019 as managing director and US head of business marketing. Previously, she'd led global marketing initiatives for Google and Facebook. TikTok appeared to value this experience and promoted her within two months to lead its global business marketing team. In this role, she launched TikTok for Business and meaningfully shaped how businesses interact with the platform.

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Some TikTok users may have skipped reviewing an update to TikTok's terms of service this summer that shakes up the process for filing a legal dispute against the app. According to The New York Times , changes that TikTok "quietly" made to its terms suggest that the popular app has spent the back half of 2023 preparing for a wave of legal battles.

In July, TikTok overhauled its rules for dispute resolution, pivoting from requiring private arbitration to insisting that legal complaints be filed in either the US District Court for the Central District of California or the Superior Court of the State of California, County of Los Angeles. Legal experts told the Times this could be a way for TikTok to dodge arbitration claims filed en masse that can cost companies millions more in fees than they expected to pay through individual arbitration.

Perhaps most significantly, TikTok also added a section to its terms that mandates that all legal complaints be filed within one year of any alleged harm caused by using the app. The terms now say that TikTok users "forever waive" rights to pursue any older claims. And unlike a prior version of TikTok's terms of service archived in May 2023, users do not seem to have any options to opt out of waiving their rights.