US lawmakers could vote this weekend on a second bill in as many months that corners TikTok’s Chinese owner ByteDance with a stark choice – sell its US business or be banned. Tik Tok Goes The Clock
Fears that data about millions of Americans could land in China’s hands have driven Congressional efforts to split TikTok from the Beijing-based company.
TikTok has said ByteDance “is not an agent of China or any other country”. And ByteDance insists it’s not a Chinese firm, pointing to the many global investment firms that own 60% of it.
But the app’s extraordinary success in the US has made it yet another flashpoint between Washington and Beijing.
Some 170 million Americans spend at least an hour of their day swiping on TikTok. That includes about six in 10 teenagers, a fifth of whom say they are on it “almost constantly”, according to Pew Research Center. More than 40% of US users say it’s their regular source of news.
A ban on TikTok could be challenged as a violation of free speech. It’s also difficult to police and possibly unpalatable in an election year. While forcing ByteDance to sell the app is seemingly simpler, that option also faces obstacles.
For one, analysts say Beijing will try its best to scupper a sale. But who will buy TikTok’s US operations, which, by some estimates, could fetch up to $100bn (£80.2bn)?
And the biggest question of all: Would ByteDance sell its most successful app?
Tik Tok Goes The Clock
Founded in 2012 by Chinese entrepreneurs, ByteDance first hit the jackpot with short video app Douyin in China. A year later, it launched TikTok, an international version. TikTok was banned in China but gained a billion users in five years.
It is now run by a limited liability company based in Los Angeles and Singapore but is essentially owned by ByteDance. While its founders own only 20% of ByteDance, it’s the controlling stake in the company. About 60% is owned by institutional investors, including major US investment firms such as General Atlantic, Susquehanna and Sequoia Capital. The remaining 20% is owned by employees around the world. Three of its five board members are American.
But Beijing’s grip over private companies in recent years worries the US about how much control the Chinese Communist Party has over ByteDance, and the data it holds. These concerns are not unfounded. Last year, a former ByteDance employee alleged in a lawsuit that Beijing had accessed TikTok user data in 2018 to spy on pro-democracy protesters in Hong Kong – ByteDance dismissed this as “baseless”.
Tik Tok Goes The Clock
