TikTok's China-based owner, ByteDance, will continue to maintain ownership of TikTok's U.S. business operations, while also ceding control over the app’s data, content, and algorithm to a newly formed joint venture. This arrangement highlights ByteDance's significant involvement in the TikTok entity, a situation that may raise concerns regarding data privacy and national security, according to three sources familiar with the matter.
Following a report by Reuters, John Moolenaar, the chair of the House Select Committee on China, announced that he would conduct thorough oversight of the deal. Moolenaar emphasized that the new arrangement should prevent any operational ties between the joint venture and ByteDance. He noted that the law has established strict guidelines designed to prohibit collaboration on the critical recommendation algorithm between ByteDance and any potential successor to TikTok.
While the structure of the joint venture remains under discussion and could change, sources indicate that the U.S. TikTok will be divided into two distinct companies. The joint venture, initially announced by former President Trump, will manage backend operations for TikTok in the U.S., specifically focusing on user data and the recommendation algorithm. Sources suggest that ByteDance will hold the position of the single largest minority shareholder in this joint venture.
In contrast, a separate division, which will remain wholly owned by ByteDance, is expected to oversee revenue-generating operations, including e-commerce and advertising. This bifurcated structure aims to streamline operations while addressing regulatory concerns regarding data management.
Reports indicate that the newly established U.S. TikTok could be valued at approximately $14 billion, according to Vice President JD Vance. Chinese media outlets, including LatePost and Caixin, have reported on this dual-structure setup, where ByteDance retains ownership of the segment that focuses on branding, e-commerce, and international connections. However, these reports were subsequently removed from various platforms.
For Trump, preserving TikTok's presence in the U.S. is a significant political objective. He frequently discusses the platform's impact on his outreach to young voters, claiming it contributed to his reelection success. With approximately 170 million U.S. users, TikTok has proven to be a powerful tool for engagement, and Trump boasts 15 million followers on his personal TikTok account. Additionally, the White House recently launched an official TikTok account, further solidifying the app's importance in the current political landscape.
As developments unfold regarding the structure and operation of TikTok in the U.S., the implications for data privacy, national security, and the app's overall impact on American culture remain a critical focus for both regulators and users alike.
