(Seoul) Born 12 years ago in Beijing, the Chinese internet giant ByteDance, known around the world as the parent company of TikTok, finds itself in the crosshairs of the American authorities.
The American House of Representatives examined a bill on Wednesday which provides for the ban on TikTok in the United States if the social network does not cut ties with its parent company ByteDance and more broadly with China.
How important is ByteDance?
ByteDance has become one of the most valuable companies in the world, at 225 billion, according to the economic intelligence company CP Insights, ahead of Elon Musk’s space company SpaceX and OpenAI, the creator of ChatGPT.
She is best known for creating the TikTok platform, launched in 2017 and which today brings together more than 1 billion users.
TikTok is the international version of the application Douyin (its name in Mandarin), launched in 2016 and intended for the Chinese market only.
Since its inception, ByteDance has diversified its business and ventured into e-commerce and travel booking, among others. The group also created an app for editing videos.
Worldwide, it has more than 150,000 employees in more than 120 cities.
Its sales will surpass $110 billion in 2023, Bloomberg reported in December, higher than the estimated revenue of fellow Chinese company Tencent.
Not being listed on the stock exchange, ByteDance is not required to publish its results, but the media estimate that its turnover is close to that of the largest companies in the world.
Who owns ByteDance?
TikTok said 60% of ByteDance was owned by institutional investors, including US asset manager BlackRock.
The founders of ByteDance own 20% of the shares, with the rest held by the group’s employees, according to TikTok.
Registered in the Cayman Islands, the group counts among its investors the Japanese SoftBank and the American investment fund KKR.
Three of the five members of its board of directors are American, again according to TikTok.
According to the ByteDance website, a Chinese company owns 1% of Douyin, the Chinese version of TikTok.
But TikTok said this was an obligation imposed by Chinese law and had no impact on ByteDance’s international operations.
Why is ByteDance worrying Washington?
Parliamentarians in the United States are concerned about the links between TikTok and the Chinese authorities, seeing a risk for the 170 million American users of seeing their personal data transferred to China.
In the United States, supporters of the bill say that the Chinese group ByteDance cannot go against requests from the Chinese government.
Several states and the federal government have banned the use of the application on official government devices, citing risks to national security.
In 2020, the application had already been threatened with ban by Donald Trump, who accused it of espionage.
The social network then admitted, after an article on the BuzzFeed site, that employees established in China had had access to data relating to American users, but denied having transmitted it to the Chinese Communist Party.
What about in other countries?
In 2020, TikTok was banned in India, after deadly clashes on the border with China.
In March 2023, the UK Parliament announced a ban on TikTok across all its devices and network, following a move taken a week earlier by the UK government.
In 2023, the United States federal government and the European Commission banned the downloading and use of TikTok on their employees’ work devices.
What is the reaction of ByteDance and TikTok?
Both claim that there is no risk that American user data will be transferred to Chinese authorities.
The CEO of TikTok, Shou Zi Chew, assured the American Congress that he had never received requests from the Chinese government to this effect and assured that, if necessary, he would refuse.
Additionally, TikTok restructured the company so that US user data remains in the country.
But if the bill is adopted, TikTok will go to the American courts, Bloomberg reported.
What about China?
China has repeatedly said it would oppose a forced sale of TikTok.
“The United States has never found evidence that TikTok threatens its national security,” said a spokesperson for Chinese diplomacy, Wang Wenbin, on Wednesday.
Banning TikTok in the United States would be “shooting yourself in the foot,” he concluded.