On Wednesday (April 24), US President signed a package of aid legislation, which includes a bill to ban or separate TikTok. The relationships between TikTok, its parent company ByteDance, and even with the Chinese Communist Party (CCP), as well as the future fate of the company in the United States, have once again become the focus.
On Thursday (April 25), the Financial Times reported that according to insiders, ByteDance, the Beijing-based parent company of TikTok, has strengthened its control over TikTok’s US operations in the past two years.
This week, the US government passed a bill forcing TikTok to separate from ByteDance within 9 to 12 months, or else face a nationwide ban.
More than 20 current and former employees told the Financial Times that as tensions escalate regarding TikTok’s ownership, the intertwining between TikTok and ByteDance will only deepen.
These individuals stated that ByteDance employees, including senior executives, have been transferred to TikTok; employees stationed in the US who can speak Mandarin have been favored for their ability to coordinate with Chinese counterparts; company restructuring targets US employees who do not meet strict performance standards.
Joël Carter, a former US Advertising Policy Manager who left in August 2023, told the Financial Times: “On the surface, these two companies (TikTok and ByteDance) appear independent. In reality, they are one entity.”
Ten current and former employees noted that over the past two years, the number of Chinese employees within TikTok has been increasing, as ByteDance relocated employees from China to other global offices including the US.
This includes senior executives. Last September 29th, the Wall Street Journal Chinese edition reported that since the beginning of this year, several top managers were transferred from ByteDance to TikTok, taking on senior positions in revenue-generating operations for this popular video-sharing app. Some of these executives were relocated from ByteDance’s Beijing headquarters to the US.
For example, Qing Lan, a senior executive who worked at Douyin for nearly five years, took charge of a department at TikTok in May aimed at advertising for small and medium-sized businesses on the platform. A document seen by the Wall Street Journal indicates this department is expected to generate nearly 20% of TikTok’s advertising revenue this year. Douyin is the sister app of TikTok in China. Meanwhile, William Sun is responsible for most of TikTok’s revenue-generating business in human resources. Elyse Zheng now oversees TikTok’s monetization strategy. Both had worked at ByteDance for several years and currently hold senior positions at TikTok.
Documents seen by the Financial Times show that due to concerns of company retaliation, most insiders requested anonymity. If employees violate the non-disparagement clause, the company may revoke bonuses and stock rewards.
In a statement to the Financial Times, TikTok said: “Like any multinational company, our employees are spread all over the world, and employees move during their careers to meet business needs. This is neither a recent development nor unique to TikTok.”
The statement added: “The premise and assertions of this story are flawed, and based on anonymous sources spreading falsehoods for personal agenda. Any journalist would know this does not meet the standards of presenting factual news.”
The US Congress and government are concerned that under the CCP’s National Security Law, the Chinese government may access TikTok’s 170 million US user data. FBI Director Christopher Wray stated that ByteDance is “controlled by the Chinese (CCP) government.”
In January, TikTok’s CEO Shou Zi Chew asserted that US user data had been moved from China to a $1.5 billion cloud structure established in cooperation with Oracle, known as the “Texas Project.”
However, Fortune reported on April 15 that many interviewed former employees (four of whom were hired only last year) revealed that during their tenure, some aspects of TikTok’s business were at least intertwined with its parent company, and the company’s independence from China largely appeared to be a facade.
Interviewed former employees disclosed that every 14 days, spreadsheets containing data of hundreds of thousands of US users, including their names, email addresses, IP addresses, and geographical and demographic information, were sent via email to ByteDance in Beijing. All this occurred while TikTok began implementing measures to keep sensitive US user data in the US and only allow US employees to access it thereafter.
After Biden signed the bill on Wednesday, TikTok pledged to challenge the US legislation in court, while the CCP government expressed opposition to selling TikTok.