TikTok may be sold to US investors to avoid US ban
A group of US investors are reportedly considering buying a video-sharing app from Chinese parent company ByteDance in order to maintain TikTok’s vast audience in America..
According to The Information and the Financial Times, a group of investors, including venture capital firms Sequoia and General Atlantic, are considering acquiring a controlling stake. Investors are in talks with the U.S. Treasury Department and other regulators over whether a spin-off of TikTok from its parent company could ease U.S. concerns about the app, FT reports, citing anonymous sources..
ByteDance CEO and TikTok Founder Reported by Bloomberg Zhang Yiming rejects these ideas as he wants to retain control of the hugely popular app, with an estimated 80 million US TikTok users.
In a statement to Bloomberg, the company echoed previous denials that it was allegedly passing on user data to the Chinese government: «We have never shared user data with the Chinese government, and we will not do so if asked to.».
ByteDance offers a very similar app called Douyin with the same logo and brand name as TikTok in China. According to FT, he will retain a minority stake in TikTok as part of the deal under discussion.
TikTok declined to comment Thursday on a possible sale to US investors and cited a statement earlier this month that ByteDance was weighing a proposal for changes to its corporate structure. In my time The Wall Street Journal reported that such changes may include setting up a headquarters for a video application outside of China or creating a new governing body.
«We are extremely confident in the long-term success of TikTok and will release our plans when we have something to announce», – said a TikTok spokesman in a statement on Thursday.
TikTok has been trying to distance itself from its owner in Beijing for months.
TikTok hired Disney veteran in May Kevin Mayer for the post of CEO. It is headquartered in Los Angeles County and has offices in London, Paris, Berlin, Dubai, Mumbai, Singapore, Jakarta, Seoul and Tokyo.
But for ByteDance, selling TikTok, which is the only major social media app built by a Chinese company to achieve significant global success, would be a big move. And that still may not be enough to allay concerns in Washington, where lawmakers and U.S. officials have argued that TikTok poses a national security threat because Beijing could use it as an espionage tool. TikTok denies these allegations..
Secretary of State Mike Pompeo and other US officials say they are considering banning TikTok. The US House of Representatives voted to ban federal employees from downloading the TikTok app on government-provided devices. And in the presidential re-election campaign Donald Trump Facebook advertisements are currently being published that disparage the merits of the Chinese app.
The ads say that «TikTok spies on you», and a link to a poll and a subscription to the Trump campaign mailing list asking if TikTok should be banned in the United States.
Wells Fargo instructed its employees to remove the app from the company‘s devices. TikTok is also under pressure in other countries..
The company withdrew from Hong Kong earlier this month after China introduced the city’s national security law. India banned TikTok last month along with several other popular Chinese apps amid growing tensions with China..