TikTok says it has signed a joint venture deal with investors that will allow the video sharing platform to continue operating in the United States and avert a potential ban linked to its Chinese ownership. The company said the agreement follows years of regulatory pressure in its largest market, where it claims more than 170 million users.
In an internal memo, TikTok chief executive Shou Chew told staff that the new United States based entity was agreed with its parent company, ByteDance. Major investors include Oracle, Silver Lake and Abu Dhabi based MGX, which will together hold half of the venture, with affiliates of existing ByteDance investors owning just over 30 percent.
Under the deal, ByteDance will retain just under 20 percent ownership, the maximum allowed for a Chinese company under US law. Chew said the joint venture would be responsible for data protection, algorithm security, content moderation and software assurance for American users.
Also Read: Nigeria spends 72% of revenue on debt servicing in seven months
The agreement responds to legislation passed under former President Joe Biden requiring ByteDance to divest TikTok’s US operations or face a ban. US officials have long raised concerns about data security and potential Chinese government influence, while enforcement of the law has been delayed by executive orders.
Leave feedback about this
You must be logged in to post a comment.