Home Tech Who Owns TikTok? Understanding Parent Company ByteDance Amidst Sell-or-Ban Legislation

Who Owns TikTok? Understanding Parent Company ByteDance Amidst Sell-or-Ban Legislation

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Over 170 million Americans use TikTok, finding it either a fun social media app or a crucial business tool. Since its surge in popularity during the pandemic, TikTok has significantly influenced American culture, serving as a search engine, community hub, and career-launching platform.

However, with President Biden signing a sell-or-ban bill into law in late April, TikTok’s future in the U.S. is uncertain. Critics view the measure as a threat to free speech, while supporters argue it’s necessary for national security.

Who Owns TikTok?

TikTok is owned by ByteDance, a private global company founded by Chinese entrepreneurs. According to TikTok, about 60% of ByteDance is owned by global institutional investors, 20% by the company’s founders, and 20% by employees. The app’s CEO is Shou Zi Chew, a Singaporean businessman.

The Evolution of TikTok

Before becoming TikTok, the app was known as Musical.ly, popular among teenagers for lip-synching. Chinese entrepreneurs Alex Zhu and Luyu Yang launched Musical.ly in 2014. ByteDance, which already owned Douyin (TikTok’s Chinese counterpart), acquired Musical.ly. In August 2018, TikTok absorbed Musical.ly to become the app we know today.

Is TikTok Owned by China?

TikTok is not based in China and is not available there; instead, Douyin serves the Chinese mainland. TikTok has global headquarters in Los Angeles and Singapore. However, ByteDance was founded by Chinese entrepreneurs Zhang Yiming and Liango Rubo and is based in Beijing, despite being registered in the Cayman Islands.

ByteDance holds a media license involving an entity affiliated with the Chinese government owning 1% of Douyin Information Service Co., Ltd. According to China’s 2017 National Intelligence law and the 2014 Counter-Espionage Law, organizations must assist with state intelligence work and cannot refuse evidence collection. This potential for Beijing to collect intelligence on U.S. users has raised concerns among U.S. lawmakers.

Despite these concerns, CEO Shou Zi Chew testified before Congress last year, stating that the company does not sell data to any data broker.

Is TikTok Getting Banned?

As of now, TikTok is not banned. The Senate passed a sell-or-ban TikTok bill with overwhelming support in April, and Biden signed it into law. The bill gives ByteDance nine months, with a possible three-month extension, to sell TikTok’s U.S. operations or face a ban. If the ban is enforced, TikTok will disappear from Apple and Google stores. Although it would remain on previously downloaded phones, it would eventually become unusable without updates.

However, this might not completely stop TikTok users from accessing the app. When India banned TikTok in 2020, users found workarounds like VPNs (virtual private networks) and changing their phone’s location.

In response to the sell-or-ban bill, TikTok and ByteDance filed a lawsuit in federal court, arguing that divestment from the parent company is not feasible and that a potential shutdown in January 2025 would silence 170 million American users. The petition states that the Chinese government “has made clear that it would not permit a divestment of the recommendation engine that is key to TikTok’s success in the United States.”