TikTok’s Chinese owner, ByteDance, has finalised a deal to establish a majority US-owned joint venture company to avoid a ban on the popular social media app used by more than 200 million Americans.
The deal is a milestone for the short video app after years of battles that began in August 2020, when US President Donald Trump first tried unsuccessfully to ban the app over national security concerns.
The new app will operate under “defined safeguards that protect national security through comprehensive data protections, algorithm security, content moderation and software assurances for US users”, the company said in a statement.
Adam Presser, who previously worked as TikTok’s head of operations and trust and safety, will lead the new venture as its CEO.
He will work alongside a seven-member, majority-American board of directors that includes TikTok’s CEO Shou Chew.
The agreement provides for investors — including cloud computing giant Oracle, private equity group Silver Lake and Abu Dhabi-based MGX — to hold a stake of 80.1 per cent in the new joint venture.
TikTok’s Beijing-based parent company, ByteDance, will retain 19.9 per cent ownership of the company.
TikTok’s algorithm has ‘stayed in Beijing’
For years, TikTok has been seen in Washington as a potential national security threat — a platform that could be used by Chinese authorities to collect data or spread disinformation.
Under the arrangement, the joint venture will assume responsibility for content moderation within the US as well as the development and enforcement of related policies.
Donald Trump has credited TikTok with helping him get re-elected. (Reuters: Kevin Lamarque)
University of Technology Sydney associate professor Marina Zhang said the deal was a “defining moment” as the first time two governments had divided ownership of data on one platform.
“It creates a template for other countries on how to separate data sovereignty and digital affairs,” she said.
Still, she said, both sides had made concessions.
“Washington gained control over data and narrative, while China preserved its intellectual property — the algorithm stayed in Beijing.“
During the Biden administration, US Congress passed a law that would ban TikTok in the US if it did not find a new owner in place of ByteDance by January 2025.
The company missed that deadline and TikTok briefly “went dark” for American users.
But on his first day back in office, Mr Trump signed an executive order to keep it running.
The Trump administration had repeatedly extended the deadline for completing the joint venture deal, most recently pushing it back to January 23.
Mr Trump has more than 16 million followers on his personal TikTok account and credited the app with helping him win re-election.
The White House also launched an official TikTok account in August.
ABC/Wires
