US to investigate TikTok after national security concerns
Beijing-based billion-dollar Bytedance has access to the data of millions of US youngsters
The US government has started a national security review of ByteDance Technology, owner of the short video-sharing social media platform TikTok.
ByteDance, whose headquarters are in Beijing, purchased TikTok’s competitor Musical.ly for around $1bn in 2017. As the US-China trade war continues and suspicion of Chinese companies operating in the US grows, lawmakers have moved to re-examine this acquisition.
The Committee on Foreign Investment in the United States (CFIUS) has started a national security investigation, observing that TikTok did not seek its clearance or approval when it purchased Musical.ly.
American youngsters aged 16-24 make up 60 per cent of the company’s 26 million monthly users. Although TikTok’s US user data is supposedly stored in America, it operates under Chinese law, leading to concerns on Capitol Hill.
American pressure has affected other Chinese tech giants this year. In May, Kunlun Tech stated its intention to sell the popular gay dating app Grindr after the CFIUS voiced its national security concerns.
There are US concerns that Chinese tech firms with links to the Beijing government potentially have access to sensitive data. Platforms are also thought to censor on behalf of the Chinese Communist Party (CCP).
Former presidential candidate Marco Rubio recently highlighted the lack of coverage that the Hong Kong protests have received on TikTok compared with US networks such as Facebook.
Although ByteDance will not welcome this scrutiny, it is unlikely to fear for its long-term profitability. Private-equity firms such as General Atlantic and KKR are major backers alongside venture capital firms such as SoftBank and Sequoia Capital.
The company has skyrocketed in its seven years of existence. It posted better-than-expected revenue in the first half of this year at over $7bn (£5.4bn, €6.3bn), improving on a valuation of $78bn at the end of 2018.