December 25, 2019

TikTok owner ByteDance denies it’s exploring selling stake in popular app


ByteDance is not currently exploring selling its stake in TikTok, despite a report from Bloomberg stating that preliminary conversations were held as scrutiny from US officials grows.

TikTok head Alex Zhu sent an internal note to staff addressing the report, which was obtained by Reuters. Zhu told employees that “from time to time you may read stories in the media that are not true,” and called Bloomberg’s report inaccurate. Zhu added that executives haven’t hosted any “discussions with potential buyers of TikTok, nor do we have any intention to.” A TikTok representative also told Bloomberg that “these rumors are completely meritless.”

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Bloomberg’s report arrives as TikTok continues to recent attention from US officials, with some senators warning the app could be a security threat. Advisors to ByteDance executives recommended “everything from an aggressive legal defense and operational separation for TikTok to sale of a majority stake,” according to Bloomberg. The company could maintain it doesn’t present any security threat when asked by US officials. ByteDance wants to maintain full control of TikTok, Bloomberg also reported, especially as the app continues to surge in popularity.

The Committee on Foreign Investment in the United States (CFIUS) is looking into ByteDance’s $1 billion purchase of in 2017. An investigation could determine if ByteDance has to divest assets, which helped build the TikTok platform. CFIUS has begun asking questions and may recommend measures TikTok can take to “avoid divesting the assets it acquired,” according to Reuters. The investigation comes as tensions between the United States and China grow.

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“I remain deeply concerned that any platform or application that has Chinese ownership or direct links to China, such as TikTok, can be used as a tool by the Chinese Communist Party to extend its authoritarian censorship of information outside China’s borders and amass data on millions of unsuspecting users,” Senator Marco Rubio stated.

ByteDance has attempted to address concerns through a couple of initiatives. The company has tried to work with more American groups, including hiring an independent American law firm in October to review TikTok’s content moderation practices. Another American firm was hired to review the company’s security practices. The firm found that TikTok could not have transmitted user data from China within the period they investigated.

Despite the company’s efforts to try and work with American firms, the more pressing issue is whether ByteDance — a company valued at $78 billion — can change people’s perceptions of using a Chinese-owned app. As The Verge’s Casey Newton wrote in November:

“As pressure escalates on TikTok, the company may find that it has few levers of support to pull on. Putting its executives forward outside the friendly confines of a press release would be a start. But so long as the Chinese government is looming behind the company’s business practices, TikTok faces a credibility gap — and it’s not clear what, if anything, can close it”.

Source: The Verge

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