Chinese company, ByteDance, the owner of popular short-video sharing app, TikTok, is considering some steps in addressing security concerns about the mobile app which has been raised in the United States with senators asking for an evaluation of its possibility as a national security risk, as well as the US Navy prohibiting TikTok from any government-issued device.
Part of these initiatives, according to sources via an online article, is the one from which "the company is considering selling off a majority stake of the popular app to financial investors to protect the business." Relatively, the same sources said, "by selling a part of the company, ByteDance could raise money before a probable fall in value which legal issues in the US bring. Other solutions speculated to have been deemed also include "an aggressive legal defense," which may be the preference of the company as ByteDance supposedly, would opt to retain full control of the business.
ByteDance Denies the Rumor
ByteDance, for its part, has denied the rumors on the business' potential sale, in public. A representative of the company said that "the rumors were completely meritless." Nevertheless, trust in ByteDance in the US at present is low, with allegations that TikTok is censoring criticism of China, particularly that of the oppression of the Chinese government of "Uighur Muslims in the country." Despite the low trust rating and accusations, and as mentioned earlier, ByteDance claims it is not presently exploring selling its TikTok stake in spite of Bloomberg's report stating that the initial conversations were held as an inspection from the officials of US grows.
Alex Zhu, the head of TikTok, sent an internal memo to the staff responding to the report, which Reuters obtained. In addition, Zhu told TikTok employees that they might read stories coming from the media from time to time, which are not true. More so, the official called the report of Bloomberg, as inaccurate, as well adding that the executives have nod hosted any "discussion with potential TikTok buyers," nor do they have any intention of doing so.
ByteDance's Efforts to Address Concerns
To address such concerns, ByteDance has tried several initiatives. First, the firm attempted working with more American organizations, and these include hiring an independent law firm late this year to evaluate the content moderation practices of TikTok. Second, it hired another American company to review its security practices. As a result, this particular firm discovered that TikTok could not have transferred user data from China during the time they investigated.
In spite of the efforts of ByteDance to try and work with American companies, it continues to face and encounter issues. Last month, its app's popularity went through scrutiny because of its relationship with the Chinese government. To date, Reuters has reported that the Committee on Foreign Investment in the United States (CFIUS) has opened a review of the company's national security since it did not seek approval to make its acquisition in 2017 of Musical.ly, another mobile app worth $1 billion.
