What to know about TikTok owner ByteDance as U.S. considers possible ban
The House of Representatives voted to pass a measure Wednesday that could lead to the forced sale or ban of video-sharing app TikTok in the United States, amid concerns that the Chinese-owned platform could be used to monitor and manipulate Americans.
The fight over TikTok, which says it has 170 million U.S. users, represents growing fears over China’s influence in the United States, especially in an election year. A nationwide ban, if it goes into effect, could pose an existential threat to one of China’s most successful internet companies.
The bipartisan legislation, the future of which will be decided in the Senate, would give TikTok’s owner, the Beijing-based ByteDance, half a year to sell the short-video platform or face a ban on the Apple and Google app stores and web-hosting services in the United States. President Biden has said he would sign the legislation into law if it passes Congress.
Here’s what to know about ByteDance and the right over TikTok in Congress.
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What is ByteDance, the Chinese company that owns TikTok?
ByteDance was founded in 2012 out of a four-bedroom apartment in northern Beijing. Its founder, Zhang Yiming, was then a 29-year-old software engineer turned entrepreneur whose vision was to use big data and machine learning to analyze and curate content according to user preferences.
ByteDance is sometimes nicknamed the “app factory” given how prolific it has been in recent years. One of ByteDance’s earliest and most popular products is the AI-powered news aggregator Jinri Toutiao, largely used in China. In 2016, the company launched the short video app Douyin, which is also hugely popular in China. In 2017, the company launched the international version of that app, known as TikTok.
TikTok is widely seen as the first Chinese app to go global and ByteDance, valued at $268 billion in December, as one of China’s most successful internet companies. A release issued last May by TikTok stated that about 60 percent of ByteDance “is beneficially owned by global institutional investors such as Carlyle Group, General Atlantic, and Susquehanna International Group,” with about 20 percent owned by “ByteDance employees around the world” and the rest owned by its founder.
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Why is ByteDance controversial in the United States?
TikTok has become a target of some U.S. legislators, who see it as a potential national security threat, amid worsening relations between Washington and Beijing.
ByteDance has repeatedly said that it has never shared data of U.S. users with the Chinese authorities, but U.S. lawmakers point out that the company could be required to turn over information to the government under Chinese law. Lawmakers have yet to present any evidence of TikTok’s alleged national security risks.
In a hearing in March 2023 before the House Committee on Energy and Commerce, TikTok CEO Shou Zi Chew said TikTok “as a U.S. company incorporated in the United States, is subject to the laws of the United States,” and has made efforts to address the concern of U.S. authorities “about TikTok’s heritage.”
“Let me state this unequivocally: ByteDance is not an agent of China or any other country,” he said in a statement.
The company has sought approval for its U.S. subsidiary to handle the management and oversight of “protected U.S. user data and the systems that power TikTok” in the United States, under an initiative known as “Project Texas.” The subsidiary, called TikTok U.S. Data Security, would report to an independent board, not to the leadership of TikTok or ByteDance, TikTok said. Under the plan, which has not been approved by U.S. authorities, data belonging to U.S. users would be stored by the Austin-headquartered technology company Oracle, with the ability to “communicate with the global TikTok service in controlled and monitored ways.”
Some experts have cautioned that a forced sale or ban, if passed, could face challenges in U.S. courts. As The Washington Post previously reported, a separate effort by President Donald Trump to force a ban of sale of TikTok in 2020 was blocked by federal courts, who ruled the government had not adequately proved that the app presented a national security threat.
ByteDance’s products have also come under more regulation from Chinese authorities. In 2018, it was forced to shutter an app reserved for jokes called Neihan Duanzi that had created a cult following but was seen by regulators as “vulgar.” Zhang apologized publicly for failing to “promote positive energy and grasp correct guidance of public opinion.”
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Who is the founder of ByteDance?
Zhang, the soft-spoken founder of ByteDance, grew up in the city of Longyan in the southwestern Chinese province of Fujian. He studied software engineering at Nankai University in Tianjin, where he fixed other students’ computers and set up websites for extra money.
After graduating, Zhang worked on a search engine for plane tickets as well as a microblogging platform before joining Microsoft. He left after a half a year because he was “bored,” according to an interview he gave in 2014. After Microsoft, he founded a real estate platform before starting ByteDance.
In a 2015 speech, Zhang said the idea for ByteDance emerged when he noticed that fewer people were reading newspapers on the subway. He said he realized that phones would become the main means to disseminate information, and demand for personalization would skyrocket.
Zhang has said that he hopes his company can be as global as Google but in a 2017 interview acknowledged the challenges. “If when Chinese companies go overseas, they can overcome cultural problems, will the overseas market be huge? I am both optimistic and pessimistic about this,” he said.
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What is his relationship to TikTok CEO Shou Zi Chew?
There is relatively little information available publicly about the relationship between Zhang and Chew, who became CEO of TikTok in 2021.
In May 2021, Zhang announced in a letter to employees that he would step down as CEO of ByteDance to focus less on day-to-day management and more on long-term strategy. Liang Rubo, a ByteDance co-founder, was announced as the new CEO of ByteDance.
Last month, Chew told The Post that he is in charge of all of TikTok’s strategic decisions. But he said he routinely updates Liang on “certain topics that I think he may have an interesting point of view, just to make sure the perspective is complete.”
As The Post previously reported, Chew, a Singaporean national who grew up in Singapore, studied economics in the United Kingdom before working at Goldman Sachs for two years. He then moved to the United States to get his master’s degree at Harvard Business School. While a student there, Chew interned at Facebook, now a bitter competitor to TikTok.
Chew has said he was first introduced to DST Global, a venture capital firm that bet on major tech firms including Facebook and Twitter, while he was working at Goldman Sachs. After graduating from Harvard, he worked with DST Global as a partner, where he helped to coordinate one of the earliest investments in ByteDance by building relationships with its founding engineers, Zhang and Liang.
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Drew Harwell, Helier Cheung and Lyric Li contributed to this report.
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