Rather than quell concerns that the app could aid Chinese spies, the news this week that Mayer will become the CEO of TikTok — owned by Beijing-based startup Bytedance — instead sparked a fresh round of calls for even tougher scrutiny.
Hawley and other lawmakers have called TikTok a threat to national security because of its ties to China, and have claimed that the company could be compelled to “support and cooperate with intelligence work controlled by the Chinese Communist Party.”
TikTok has said that it operates separately from ByteDance. It says its data centers are located entirely outside of China, and that none of that data is subject to Chinese law. US user data is stored in the United States, with a backup in Singapore, according to TikTok.
“While we think the [national security] concerns are unfounded, we understand them and are continuing to further strengthen our safeguards while increasing our dialogue with lawmakers,” a TikTok spokesperson told CNN Business.
The company also says it has formed a “Transparency Center” in Los Angeles, which will allow third party experts to look into TikTok’s source code, along with the company’s work on data privacy, security and content moderation.
But if ByteDance was hoping Mayer could smooth things over with Hawley and his colleagues, experts say the company will be disappointed.
“TikTok will always be considered a threat, no matter who is at the helm, because of what it represents: the emergence of Chinese tech-ecosystems,” said Abishur Prakash, co-founder of Center for Innovating the Future, a consulting firm that works on technology and geopolitics.
Until now, American companies have dominated when it comes to cloud computing, social media and artificial intelligence, said Prakash.
“Now, Chinese firms, like TikTok, are creating their own alternatives, building a new kind of geopolitical footprint for China,” he said.
An explosion of popularity, followed by controversy
TikTok has exploded in popularity in the United States and other western countries, becoming the first Chinese social media platform to gain traction with users outside of its home country. It was downloaded 315 million times in the first three months of this year, more quarterly downloads than any other app in history, according to analytics company Sensor Tower.
It hardly seems like the kind of content that would alarm US lawmakers.
“The business they’re in has become politically and culturally sensitive. Forever,” he said.
TikTok has repeatedly said that it does not moderate content due to political sensitivities. In addition to storing data outside of China, the company has also said that it has a “dedicated technical team focused on adhering to robust cybersecurity policies, and data privacy and security practices.”
The suspicion from US lawmakers, though, could be damaging for TikTok.
Such an investigation could be a blow to TikTok, because CFIUS has the authority to retroactively review foreign acquisitions of US businesses and force a company to divest its interests.
Distancing itself from China
TikTok has been trying to separate itself from China and its Beijing-based parent company.
Its main office is in Los Angeles County, and it has offices in London, Paris, Berlin, Dubai, Mumbai, Singapore, Jakarta, Seoul and Tokyo. TikTok is also not available in China, although another Bytedance app — Douyin — is similar and they share the same logo and branding.
A TikTok spokesperson told CNN in an interview earlier this year that it is managed separately from other ByteDance apps, and owned by an entity outside of China.
Towson called TikTok’s use of legal structures to distance itself from mainland China and its parent company “nonsense.”
Tech founders and CEOs are responsible for their companies, much like when Facebook or any of its apps are criticized by officials, Mark Zuckerberg often comes under scrutiny, said Towson.
Likewise with Zhang, the founder and CEO of ByteDance.
“He owns it, full stop. Legalese is not going to change that,” said Towson.
A tense political climate
The other problem for TikTok is the current political climate: US-China relations are reaching new lows.
Washington last week pushed for a new crackdown on telecom equipment and smartphone maker Huawei by moving to further restrict its ability to work with US companies. The Global Times, a combative state-run media tabloid in China, hinted that Beijing could soon retaliate with a long-rumored blacklist of foreign companies.
And President Donald Trump -— who has claimed, without providing evidence, that the coronavirus originated in a laboratory in Wuhan, China — could hit the country with more tariffs as punishment for the pandemic.
Against that backdrop, hiring Mayer or any other American wouldn’t be enough, according to Prakash.
“Hiring a local is part of an age old playbook. And, while it might have worked in the past, it won’t for TikTok,” he said.
Because technology is driving geopolitics, Prakash added, the United States will be eyeing Chinese technology firms with increasing scrutiny.
“Who is in the leadership position won’t change the fact that TikTok is going to be in the crosshairs of the US government,” he said.
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