TikTok, the popular music-video app, is building up its fledgling lobbying operations to counter stepped-up pressure in Washington over its Chinese ownership and wage an escalating battle with Facebook for viewers.
The company, which registered its first lobbyist in June, is seeking to add a US policy chief, plans to further expand its internal policy staff and is reshuffling outside lobbyists, according to people familiar with its plans.
The policy chief position is a new one and will help shape the company’s advocacy priorities and oversee its growing lobbying operations, said two people familiar with the moves.
TikTok, which is owned by Beijing-based ByteDance, also has hired Monument Advocacy, a public affairs and lobbying firm known for its expertise in technology policy, according to another person familiar with the matter. The person said TikTok is winding down its relationship with lobbyists at the law firm Covington & Burling, which has close ties to Facebook.
The relationship between Covington and Facebook was one reason for TikTok’s decision to break with the firm, the person said. Facebook Chief Privacy Officer Erin Egan formerly co-chaired Covington’s data privacy and security practice. Facebook also hired Covington to help work on its anti-conservative bias report released in August. Covington’s Jon Kyl, a former Republican senator from Arizona, headed up that review.
The lobbying push is part of TikTok’s effort to calm US regulators and policy makers and try to persuade them that it’s really a US company, said one of the people. Concerns are growing that TikTok could pose a national security threat because of its Chinese ownership and the risk that the government in Beijing could get access to the app’s growing troves of user data.
Facebook has underscored Washington’s concerns about TikTok as it combats its own scrutiny from lawmakers and antitrust enforcers.
Chief Executive Officer Mark Zuckerberg insinuated during an October speech at Georgetown University that protesters in Hong Kong use Facebook’s WhatsApp messaging platform “due to strong encryption and privacy protections,” whereas “mentions of these protests are censored, even in the US” on TikTok.
Monument Advocacy counts Amazon.com and Microsoft as clients, but doesn’t work directly with Facebook, unlike other firms TikTok spoke with, the person said. Monument does represent an industry coalition on government surveillance that includes Facebook.
TikTok, Monument and Facebook declined to comment. Covington didn’t respond to requests for comment. The lobbying changes haven’t yet been disclosed in public filings.
ByteDance is expanding its operations aggressively across the US, hiring staff in Los Angeles, San Francisco, Chicago and New York. The app has logged more than 564 million installations this year and has been downloaded 1.45 billion times since launching, according to data from Sensor Tower, a San Francisco-based market intelligence firm that tracks the global app market.
US officials are reviewing whether ByteDance’s $1 billion purchase of social media startup Musical.ly two years ago to merge it with TikTok poses a national security risk, Bloomberg News has reported. That panel, the Committee on Foreign Investment in the US, or Cfius, has toughened scrutiny of acquisitions of American companies under President Donald Trump and is paying closer attention to how deals can give foreign buyers access to data about US citizens.
“We have no higher priority than earning the trust of users and regulators in the US,” a TikTok representative said in a statement earlier this month.
Lawmakers had pushed for a review, saying that TikTok poses a potential counterintelligence threat. Senate Minority Leader Chuck Schumer of New York wrote a letter with Republican Tom Cotton of Arkansas to U.S. Acting Director of National Intelligence Joseph Maguire. They expressed concerns about foreign interference in American elections and the security of user data on the app, in addition to national security fears.
The company was also the focus of a hearing earlier this month during which one Republican senator blasted it as a threat to global data security.
“All it takes is one knock on the door of their parent company, based in China, from a Communist Party official, for that data to be transferred to the Chinese government’s hands whenever they need it,” said Josh Hawley of Missouri, a frequent tech critic.
TikTok has rejects the notion it’s controlled by the Chinese government or that U.S. user data is at risk.
“We are not influenced by any foreign government, including the Chinese government,” the company wrote in a blog post last month. “TikTok does not operate in China, nor do we have any intention of doing so in the future.”
ByteDance, which began lobbying this summer, registered its in-house lobbyist Eric Ebenstein in June and brought on Covington in July, paying it $110,000 during the third quarter, according to federal disclosures. The company spent a total of $120,000 on lobbying from July through September.
TikTok also announced last month that it had tapped another top legal and lobbying firm — K&L Gates — to advise it on policies around transparency and content moderation, though the firm won’t be lobbying.
Former representative Bart Gordon, a Tennessee Democrat who led the House Science and Technology Committee, is on the account, as is former Republican Representative Jeff Denham, who represented a district in California.
© 2019 Bloomberg LP
TikTok Sale: Algorithm Question Said to Complicate Deal
Sale talks for TikTok’s US operations have been complicated by the key question of whether the app’s core algorithms can be included as part of a deal, according to a report in The Wall Street Journal that cited unidentified people familiar with the matter.
Those algorithms decide what videos users see without first requiring them to follow other users or specify their preferences. The Journal report stated the algorithms were considered part of the deal negotiations up until Friday.
That’s when the Chinese government introduced export restrictions on artificial intelligence technology that appear to cover content-recommendation algorithms such as the one powering TikTok. The move followed President Donald Trump’s effort to force a sale of TikTok’s US operations by September 20.
Those export restrictions mean that TikTok’s Chinese owner, ByteDance, would have to obtain a license to export any restricted technologies to a foreign company. The question is whether its algorithms would need Chinese government approval for transfer, and if so, whether Beijing would sign off.
The Journal report said both the prospective buyers and the seller, ByteDance, are trying to figure that out. Prospective buyers for US TikTok assets include a Microsoft-Walmart team-up and, reportedly, Oracle.
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TikTok CEO Kevin Mayer Quits After Three Months, Just as Firm Challenges US Ban
TikTok CEO Kevin Mayer has left the Chinese-owned video app firm just three months since joining, and only days since the company sued the administration of US President Donald Trump over an executive order effectively banning it in the United States.
He will be replaced by US General Manager Vanessa Pappas on an interim basis, TikTok said in a statement.
The resignation comes at a tricky time for super-fast growing TikTok as it tries to persuade both the United States and India that it is not a security threat, while at the same time holding discussions with prospective buyers following a second US order demanding the sale of its US operations.
In another development, former TikTok India manager Raj Mishra has been appointed by Triller as Country Manager and Head of Operations for the country. Mishra was the very first employee to be hired at TikTok India. In his new role at Triller, he will be leading and furthering the development of video-sharing app’s products, operations, and overall business goals.
“In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for,” Mayer said in an letter to employees.
“Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company.”
ByteDance founder and CEO Zhang Yiming said in a separate letter reviewed by Reuters that the company was “moving quickly to find resolutions to the issues that we face globally, particularly in the US and India”.
He said Mayer had joined just as the company was “entering arguably our most challenging moment.”
“It is never easy to come into a leadership position in a company moving as quickly as we are, and the circumstances following his arrival made it all the more complex,” Zhang said.
ByteDance employees told Reuters they were not surprised by Mayer’s decision given TikTok’s unpredictable future, and also because the ex-Disney executive has not had a significant role in some important decisions as he was still new to the team.
Zhang has been the key person in TikTok sale talks, said two people with knowledge of the matter. But Mayer represented TikTok to discuss with senior executives of interested buyers just days ago, a third person said.
TikTok’s decision to launch a $200 million (roughly Rs. 1,478 crores) “creator fund” in July was spearheaded by TikTok’s former head Alex Zhu, though Mayer was also directly involved, said two of the people. The project was initiated internally much earlier than Mayer’s arrival, one of the people said.
“The learning curve was steep for him, from daily operations to geopolitical implications,” said one of the people.
ByteDance did not immediately respond to Reuters’ request for comment.
“Whether TikTok reaches an agreement to sell its US business or decides to duke it out in the courts, the role for Mayer will not be anything like that he had envisioned when he joined,” said Mark Natkin, managing director of Marbridge Consulting in Beijing.
Mayer’s departure is not a great boost for company morale right now, Natkin said.
US India Challenges
Amid growing distrust between Washington and Beijing, Trump complained that TikTok was a national security threat and could share information about users with China’s government.
Trump issued an executive order banning US transactions with TikTok on August 6, effective in mid-September. He issued a separate order about a week later giving ByteDance 90 days to divest of TikTok’s US operations and data.
ByteDance has been in talks to sell TikTok’s North American, Australian and New Zealand operations which could be worth $25 billion (roughly Rs. 184,816 crores) to $30 billion (roughly Rs. 221,801 crores) to companies including Microsoft and Oracle, people with knowledge of the matter have said.
The company has also been targeted in India, where TikTok was one of 59 Chinese apps banned by the Indian government in June following a border clash between India and China.
That month, Mayer wrote to India’s government saying China’s government has never requested user data, nor would TikTok turn it over if asked.
TechCrunch reported earlier this month that ByteDance was in talks with India’s Reliance for investment in TikTok.
TikTok has become a global sensation since ByteDance launched the app in 2017, with operations in countries such as France, South Korea, Indonesia, Russia and Brazil. In April, the app hit 2 billion downloads globally.
© Thomson Reuters 2020
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Social Networking Sites Market 2020 (COVID-19 Worldwide Spread Analysis) by Key Players …
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1. North America Country (United States, Canada)
2. South America
3. Asia Country (China, Japan, India, Korea)
4. Europe Country (Germany, UK, France, Italy)
5. Other Country (Middle East, Africa, GCC)
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TOC Snapshot of Global Social Networking Sites Market
1. Social Networking Sites Product Definition
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3. Manufacturer Social Networking Sites Business Introduction
4. Social Networking Sites Market Segmentation (Region Level)
5. World Social Networking Sites Market Segmentation (Product Type Level)
6. Social Networking Sites Market Segmentation (Industry Level)
7. Segmentation (Channel Level) of Social Networking Sites Market
8. Social Networking Sites Market Forecast 2020-2027
9. Product Type Social Networking Sites Segmentation
10. Segmentation of Social Networking Sites Industry
11. Cost of Social Networking Sites Production Analysis
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