What is ByteDance, TikTok’s parent company in the US spotlight?

Since his birth in an apartment Beijing 12 years ago, ByteDance became one of the largest technology companies in the world, best known for being the creator of TikTok.

However, this popular social network is currently facing a tough campaign in Washington. The House of Representatives approved a bill on Wednesday that could ban the application in the United States if it does not cut ties with its parent company.

How big is ByteDance?

In recent years, ByteDance has managed to position itself as one of the most valuable companies in the world, valued at around US$225 billion and, therefore, above SpaceX or OpenAI, according to the market intelligence firm CP Insights.

Tiktok, an application launched in 2017 by ByteDance as an international version of Douyin – which currently has hundreds of millions of users – captivated the world and amassed more than 1 billion users in four years.

Thanks to the enormous growth of these networks, ByteDance has also ventured into e-commerce and travel bookings, and claims to have more than 150,000 employees in almost 120 cities around the world.

This private Chinese company does not disclose its revenues and profits, but media estimates place it on the same level as some of the largest companies in the world.

In 2023, ByteDance’s sales will exceed $110 billion, Bloomberg said in December, higher than Chinese tech giant Tencent’s estimated revenue for that year.

ByteDance did not respond to AFP’s questions about its earnings.

Both Tiktok and Meta, Facebook’s parent company, pay AFP and more than 100 fact-checking organizations to verify videos that could contain false information.

Who owns ByteDance?

TikTok indicated that around 60% ByteDance belongs to institutional investors, including the American giant BlackRock.

The founders of ByteDance have a twenty% and the rest belong to employees, according to the social network. The Chinese company, incorporated in the Cayman Islands, also includes General Atlantic among its investors. Three of its five board members are Americans, according to TikTok.

A Chinese state entity owns a 1% from Douyin, indicates the ByteDance website. TikTok assures that it is a requirement under Chinese law and that it does not affect the international operations of the parent company.

The technology news website The Information reported in 2021 that this participation of 1% includes a seat on the board.

In March last year, during a US congressional hearing, TikTok CEO Shou Zi Chew responded “I think so” when asked if a Chinese official was on the ByteDance board.

However, he assured that Tiktok will not be “manipulated by any government.”

Why is ByteDance worrying the United States?

Many US lawmakers are not so sure that TikTok is independent from Beijing, even though its headquarters are not in China.

The bill approved this Wednesday in the House of Representatives seeks to pressure TikTok to separate itself from ByteDance.

Those who support this legislative initiative claim that ByteDance allows Beijing to spy on and manipulate some 170 million users in the United States.

US intelligence and security agencies – including the director of the FBI this week – shared these concerns.

TikTok is banned from the work phones of government employees in the United States and other nations, such as Australia and Canada, for security reasons.

How did ByteDance and TikTok respond?

Both assure that there is no risk to the data of American users. TikTok’s CEO insists the Chinese government never asked for this data, and never provided it.

TikTok claims that it routes all of its traffic in the United States through infrastructure in this country. If this law is approved, the company will take the case to court, according to Bloomberg.

However, its fate in the Senate is uncertain, as key figures oppose taking such a drastic measure against the popular application.

And China?

China has repeatedly said it opposes a forced sale of TikTok and on Wednesday warned against targeting the company.

“Although the United States has never found evidence that TikTok threatens American national security, it has not stopped cracking down on it”said Foreign Ministry spokesman Wang Wenbin, condemning it as “bullying behavior.”

Any sale of TikTok will likely require approval from Beijing.

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