The US House of Representatives on Wednesday passed a bill forcing TikTok's Chinese owner ByteDance to divest the U.S. assets of TikTok in about six months or face a ban. The app is currently being used by about 170 million Americans.
The bill has been passed with a majority of 352-65 and it received support from both political parties. However, its fate in the Senate is uncertain as some senators are in favour of a different approach to regulating foreign-owned apps that may pose security threats. The Senate Majority Leader, Chuck Schumer, has not yet revealed his plan of action.
TikTok is currently under scrutiny by some U.S. lawmakers who view it as a possible national security risk, particularly given the increasingly tense relationship between Washington and Beijing. ByteDance, the parent company of TikTok, has repeatedly denied any sharing of data belonging to U.S. users with the Chinese government. However, U.S. legislators have pointed out that ByteDance may be compelled under Chinese law to provide information to the government.
What is ByteDance and its relationship with TikTok?
Established in 2012 by Zhang Yiming, ByteDance started in a small apartment in Beijing. The company's goal was to use big data and machine learning to personalize content for individual users. Due to its diverse and extensive app development, ByteDance is often called the "app factory." One of its first successful products was Jinri Toutiao, an AI-powered news platform that gained popularity in China. Later, in 2016, ByteDance introduced Douyin, a short-form video app that became very popular in the Chinese market. The company's global ambitions were realized with the launch of TikTok in 2017, which is the international version of Douyin.
TikTok's rise to global fame was a significant milestone for ByteDance, solidifying its status as a leading company in China's internet sector. As of May 2021, TikTok revealed that global institutional investors, such as Carlyle Group, General Atlantic, and Susquehanna International Group, owned 60% of ByteDance. Approximately 20% was owned by employees worldwide, and the remaining stake was held by the founder, Zhang Yiming.
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