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US government investigating TikTok’s two year old acquisition of Musical.ly
By Chris Cooke | Published on Monday 4 November 2019
The US government has launched a national security review of TikTok’s 2017 acquisition of rival Musical.ly, according to Reuters.
It follows recent calls by political types in Washington for a formal investigation into the operations of the stupidly popular TikTok app, which is owned by Chinese firm ByteDance. Various concerns have been raised about how user data is stored by the TikTok platform and as to whether the Chinese company has been censoring content on that platform that would be politically sensitive in its home country.
For its part, 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. Perhaps in a bid to reinforce that point, the boss of TikTok – Musical.ly founder Alex Zhu – recently started reporting directly into ByteDance CEO Zhang Yiming rather than Douyin boss Zhang Nan.
Musical.ly was also a Chinese company but, after becoming particularly popular in the US, also set up a base in California. While it continued to run as a standalone service for a short while after the Bytedance acquisition, Musical.ly was then merged in with the TikTok app last year. This allowed Bytedance’s own app to quickly become a global phenomenon with a significant user base among young consumers in key markets like the US.
Sources have confirmed to Reuters that the American government’s Committee On Foreign Investment is now reviewing the two-year old Musical.ly acquisition, which it is able to do because Bytedance did not seek the committee’s clearance at the time of the deal.
It’s thought that TikTok may voluntarily agree to introduce a number of new measures to allay the concerns of the committee in order to avoid any suggestion that the 2017 deal should be reversed. These measures may in turn satisfy TikTok’s other critics in Washington.
A spokesperson for the app told the newswire: “While we cannot comment on ongoing regulatory processes, TikTok has made clear that we have no higher priority than earning the trust of users and regulators in the US. Part of that effort includes working with Congress and we are committed to doing so”.
