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TikTok looks to boost US operation to allay regulator concerns
By Chris Cooke | Published on Friday 29 November 2019
Chinese tech firm and TikTok owner ByteDance is looking to ramp up the US side of its operations in a bid to allay fears among the American political community over how the stupidly popular video sharing app manages the content and data on its platform.
It recently emerged that the American government’s Committee On Foreign Investment In The United States – or CFIUS – is investigating ByteDance’s 2017 acquisition of lip syncing music app Musical.ly, a deal which helped TikTok’s rapid expansion globally.
Musical.ly was a Chinese company too, but – after becoming particularly popular in the US – it also set up a base in California. After the Musical.ly and TikTok apps were merged, American politicians started to raise some concerns about where data associated with US users was being stored, and also over whether or not the Chinese company censored content on the TikTok platform that might be politically sensitive in its home country.
Responding to those concerned politicians Stateside, ByteDance insists that TikTok is run separately to the equivalent service that operates within China, which goes by the name Douyin, and therefore content shared on the platform is not within the jurisdiction of Chinese law. It adds that American user data is stored in the US, with a back-up in Singapore.
However, according to Reuters, the Chinese firm is busy putting ever more distance between its TikTok division and the rest of the company, including Douyin, in a bid to allay the ongoing concerns in Washington.
In fact, that process had begun even before the CFIUS came knocking last month. For example, over the summer standalone product, legal, marketing and business development teams were set up for TikTok, separate from those performing the same tasks for Douyin.
But those efforts are ongoing. In particular the company is seeking to grow its team of developers within the US, so it is less reliant on its Chinese staff, while also setting up a new team in its California office to oversee data management. That team would decide what data the company’s Chinese employees should have access to and monitor what they then do with it.
Reps for CFIUS declined to comment on the latest Reuters report, though Nevena Simidjiyska at law firm Fox Rothschild LLP, who has expertise on how the committee works, told the newswire: “Shifting a company’s operations away from China, geographically and technically, can give CFIUS more comfort that the company is really independent of its Chinese owner and the Chinese government”.
