ByteDance contemplates changing the corporate structure of TikTok

Author at TechGenyz Business
ByteDance Office
ByteDance Office | Image: WSJ

After coming under scrutiny from several nations over their Chinese ties, ByteDance Ltd is discussing changing the corporate and management structure of their short video app, TikTok. There have been talks of creating a new management board and shifting the company headquarters away from Beijing, in order to establish a distance from the Chinese government.

ByteDance is reportedly worth about $100 billion as of May 2020 and has US investors and backers like Coatue Management and Sequoia Capital.

During the pandemic months, internet users have resorted to TikTok for their entertainment and the app has seen a surge in downloads. In the first quarter of 2020, TikTok made a record for itself by having the most number of downloads in a single quarter, 315 million, to be exact.

But following the disputes between China and most world nations, ByteDance has faced their own share of backlash, with the raising concerns regarding the large volume of user data collected by TikTok. Certain officials have also speculated about the possible ties between the Beijing-based multinational company and the Chinese government. They have wondered whether TikTok might be sharing sensitive user data with the latter, thereby violating cyber privacy policies.

In the United States, there is a chance of a possible ban on TikTok, as hinted by Secretary of State, Mike Pompeo in an interview with Fox News.

Following border tensions along the Line of Actual Control, between India and China, the former has banned TikTok along with 58 other Chinese apps in order to maintain the “sovereignty and security” of the Indian cyberspace. TikTok had one of its biggest markets in India since it is available in 14 Indian languages.

Meanwhile, TikTok has reacted to Beijing’s imposition of main-land style surveillance in Hong Kong. This is much more strongly than the Western Media by pulling out of the city completely, while Facebook and Twitter only stated that they would pause interactions with the Hong Kong police.

In May 2020, Walt Disney Co. executive Kevin Mayer was appointed CEO of TikTok and COO of ByteDance, providing the company with an American face. The company also stated that Chinese moderators are not allowed to handle user data in the company.

ByteDance is considering opening a new headquarter around December, possibly in Singapore, London or Dublin, reported the Wall Street Journal.

Analysts have speculated that it is going to be hard for ByteDance to convince their global audience that they have severed ties and are not influenced by Chinese authorities.