All about TikTok’s parent company ByteDance in the US crosshairs

ByteDance launched TikTok in 2017 and the app took the world by storm (Representational)

Washington:

From its birth in a Beijing apartment 12 years ago, ByteDance has grown into one of the world’s largest tech companies – best known in most countries as the creator of TikTok.

But TikTok now faces a fierce campaign in Washington: The House of Representatives is set to vote on Wednesday on a bill that could ban the hugely popular video-sharing app in the United States if This does not differentiate itself from ByteDance.

How big is ByteDance?

ByteDance has become one of the world’s most valuable companies in recent years, worth about $225 billion, according to market intelligence firm CP Insights.

This puts it well above Elon Musk’s SpaceX and ChatGPT maker OpenAI.

ByteDance launched TikTok in 2017 and the app took the world by storm, surpassing one billion users in four years.

The app was an international version of Douyin, which was released in China in 2016 and now has millions of users.

Due to the explosive growth of these apps, ByteDance has expanded into e-commerce and travel booking, and has also released a video editing app.

The Chinese company says it has more than 150,000 employees in about 120 cities around the world.

A privately held firm, ByteDance does not release revenue and profit figures, but media estimates of its earnings put it on par with some of the world’s largest companies.

Bloomberg reported in December that ByteDance’s sales could surpass $110 billion in 2023, more than Chinese tech giant Tencent’s projected revenue that year.

ByteDance did not respond to AFP questions about its revenue, which includes its earnings from TikTok.

AFP, along with more than 100 fact-checking organizations, is paid by TikTok and Facebook’s parent company Meta to verify videos that potentially contain misinformation.

Who owns ByteDance?

TikTok has said that ByteDance is about 60 percent owned by institutional investors including US giant BlackRock.

According to TikTok, ByteDance’s founders own a 20 percent stake, and the rest is held by employees.

Incorporated in the Cayman Islands, ByteDance also lists General Atlantic among its investors. According to TikTok, three of ByteDance’s five board members are American.

According to the ByteDance website, a Chinese state-owned entity owns 1 percent of Douyin. TikTok has said this is a requirement under Chinese law and does not affect ByteDance’s international operations.

Tech news website The Information reported in 2021 that a 1 percent stake in ByteDance’s Chinese unit also came with a board seat.

When asked during a US Congressional hearing in March last year whether any Chinese officials were on Beijing ByteDance Technology’s board, TikTok CEO Shou Zi Chew said, “I think so”.

However, he said at that hearing that TikTok “will not be manipulated by any government”.

Why does ByteDance worry the United States?

A large number of US lawmakers – Republican and Democrat – do not agree that TikTok is independent from Beijing, despite being headquartered outside China.

The app has been a diplomatic dispute between the United States and China since the administration of former President Donald Trump once wanted to ban the app.

Now, a bill in Congress aims to force the company to sever ties with ByteDance or be banned from the United States.

Supporters of the bill say ByteDance, as a Chinese company, cannot go against Beijing’s wishes, and provide access to the data of more than 170 million US users for everything from spying to election influence campaigns. .

These concerns have also been expressed by US intelligence and law enforcement agencies – including the FBI director this week – as well as other regulators.

TikTok has been banned from the work phones of government employees in the United States and several other countries, including Australia and Canada, over security concerns.

In 2020, TikTok was among hundreds of Chinese apps banned in India following deadly clashes along the country’s border with China. New Delhi had said at the time that the sanctions were aimed at protecting against threats to its sovereignty.

How have ByteDance and TikTok responded?

Both insist that there is no threat to US user data. TikTok’s CEO has told Congress that the Chinese government has never asked for US user data from the company, nor has it provided it.

The company says it now routes all of its US traffic through infrastructure in the United States, and that it is deleting the data it previously collected. It also said that Douyin employees do not have access to TikTok’s US user data.

According to Bloomberg, if the law is passed, TikTok will take the fight against the forced break from ByteDance to the United States courts.

The White House has said that if the bill passes Congress, US President Joe Biden will sign it, although its chances of success are uncertain given opposition in the Senate.

What about China?

China has repeatedly said it opposes the forced sale of TikTok. It warned against targeting TikTok on Wednesday.

Foreign Ministry spokesperson Wang Wenbin described the bill as “threatening”, saying, “Although the United States has never found evidence that TikTok poses a threat to US national security, it has not stopped suppressing TikTok “

“In the end, it will inevitably come back to harm the United States itself.”

Any sale of TikTok would likely require Beijing’s approval.

The Chinese Ministry of Commerce published regulations in 2020 that added “civilian use” to the list of technologies restricted for export.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)