The US government opened an investigation into TikTok related to national security issues. This Chinese-made social media video application, ByteDance Technology Co., has acquired the US social media application Musical.ly, said three sources.
The acquisition of US $ 1 billion was completed two years ago. US lawmakers have called in recent weeks for intelligence to conduct an investigation of TikTok, because of concerns that Chinese companies are censoring politically sensitive content.
TikTok is becoming more popular among US teenagers at a time when tensions are rising between Washington and Beijing because of trade wars and technological competition. About 60% of the 26.5 million active monthly users of TikTok in the US are between 16 and 24 years old.
The Foreign Investment Committee in the United States (CFIUS) began reviewing the Musical.ly agreement, said the source, quoted from VOA Indonesia, Monday (11/04/2019). TikTok did not ask permission from CFIUS when it acquired Musical.ly, thus giving the US room to conduct an investigation.
CFIUS is in talks with TikTok about steps that can be taken to avoid the release of Musical.ly assets, said the source again. The details of the related discussion, which CFIUS called mitigation, could not be studied.
"Although we cannot comment on the ongoing regulatory process, TikTok has made it clear that we do not have a higher priority than gaining the trust of users and regulators in the US," said a spokesman for TikTok.
"Part of that effort includes working with Congress and we are committed to doing so," he added, whose name was reluctant to be named.
Meanwhile, a spokesman for the US Treasury said, legally, the information submitted by CFIUS should not be disclosed to the public.
Criticized Facebook boss
Last week, US Senate Minority Leader Chuck Schumer and Senator Tom Cotton sent a letter to Joseph Macguire, acting director of national intelligence, to conduct a national security investigation.
They are worried about collecting data on video sharing platform users, and whether Chinese censor content is seen by US users.
On Friday, Schumer welcomed the news of the investigation in a statement sent by email. He said, "Validation of our concern that applications such as TikTok can pose a serious risk to millions of Americans and deserve greater scrutiny."
TikTok allows users to create and share short videos with special effects. The company said US user data was stored in the country, but senators noted ByteDance was governed by Chinese law.
TikTok also underlined that China does not have jurisdiction over application content, which does not operate in China and is not influenced by foreign governments.
Facebook CEO Mark Zuckerberg, whose products compete with TikTok, also criticized TikTok for censorship.
The United States is increasingly examining application developers for the personal data they handle, especially if some of them involve US military or intelligence personnel.
The Chinese game company, Beijing Kunlun Tech Co. Ltd., said in May this year it would try to sell the gay dating application, Grindr, after CFIUS approached it with national security issues.
Last year, CFIUS forced Ant Financial China to cancel plans to buy MoneyGram International Inc. because of concerns about data security that could identify US citizens.
Must Go Through Administrators
In addition, the panel also forced Oceanwide Holdings and Genworth Financial Inc. to work through US third-party data administrators to ensure that Chinese companies cannot access the personal data of US insurance company customers.
ByteDance is one of the fastest growing startups in China. It has the country's leading news aggregator, Jinri Toutiao, as well as TikTok who have attracted the attention of celebrities, such as Ariana Grande and Katy Perry.
Analysts cited ByteDance as a strong threat to other Chinese technology industry companies, including social media and gaming giant Tencent Holdings Ltd and search engine leader Baidu Inc.
Globally, the ByteDance application has 1.5 billion active monthly users and 700 million active daily users, the company said in July.
The seven-year-old Chinese startup posted better-than-expected revenue for the first half of 2019 above US $ 7 billion, sources said.
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