Tiktok could be sold to US investors to avoid American ban
Beleaguered video app Tiktok could be split from its Chinese parent company Bytedance and sold off to US investors in a bid to curtail a mooted ban on the app in America, as questions over the company’s data protection policies face mounting criticism on both sides of the Atlantic.
Tiktok’s $110bn (£86bn) parent firm Bytedance is in talks with a small group of US investors to sell off a majority stake in the viral video platform, according to Silicon Valley news site The Information.
Discussions are said to be preliminary, as the Chinese firm explores a range of options to avoid threats of a TIktok ban in the US over national security fears.
It comes after US secretary of state Mike Pompeo has called for the social media platform to be outlawed from American soil over concerns that data collected by Tiktok could be handed over to the Chinese state.
Asked on US news channel Fox News if he recommended downloading the app, Pompeo said: “Only if you want your private information in the hands of the Chinese Communist Party.”
India, the video platform’s largest non-domestic market, earlier this month banned Tiktok and 58 other Chinese apps from the country following claims that they posed a “threat to the sovereignty and security” of the nation.
Mark Meadows, US President Donald Trump’s chief of staff, last week said that White House officials were looking to follow suit “within weeks, not months”, claiming that Tiktok has “the potential for national security exposure [by a] foreign adversary”.
ByteDance’s sale discussions have reportedly included the company’s founder and chief executive Zhang Yiming, and Neil Shen, a board member and a partner at Sequoia Capital’s Chinese branch.
The sale plan would require investors such as Sequoia, General Atlantic and New Enterprise Associates to form a consortium, with Bytedance potentially retaining a minority stake in the video platform.
It is thought a formal split from China would allay spreading fears that the video platform’s parent company is beholden to Beijing authorities and could be used as a tool of Chinese state surveillance.
Tiktok has strongly denied such claims. Theo Bertram, Tiktok’s head of public policy for Europe, the Middle East and Africa, on Monday told the BBC “the suggestion that we are in any way under the thumb of the Chinese government is completely and utterly false.”
However, concerns that the app may pose national security concerns have spread across the Atlantic, after Tory MPs this week warned that Tiktok is”’as much a threat to Britain” as banned telecoms firm Huawei.
Former Conservative party leader Iain Duncan Smith said: “Chinese social media app Tiktok is as much of a threat to the UK as Huawei. I think the service should be banned because of its proximity to Chinese intelligence services raising real serious concerns, as big as with Huawei over the role that they play.”
Tiktok, which is one of the world’s most popular apps, with upwards of 1.5bn downloads around the globe, on Sunday shelved plans to establish its new international headquarters in London following growing diplomatic fears.
Tiktok had been in discussions with the UK government over the past few months to locate its headquarters in the capital as part of a strategy to distance itself from its Chinese ownership, however the talks have since broken down.
Chinese owner Bytedance has already made efforts to distance itself from Tiktok, hiring former Walt Disney executive Kevin Mayer as the US app’s new chief executive and promising to hire another 10,000 US staff over the next three years.
Tiktok was approached for comment.