Wanted: A New Home for TikTok That’s Outside China
With TikTok's increased fame and popularity comes more and more scrutiny over its ownership in China. To counter this, the company is said to be looking for a headquarters outside of China and has narrowed down the contenders to Dublin, London, or Singapore.
The Wall Street Journal reports that the company has been exploring the move for some time, but efforts to leave China have accelerated in the past few months as it finds itself in the crosshairs of the Committee on Foreign Investment in the United States (CFIUS) over the $1 billion acquisition of Musical.ly -- which was re-branded as TikTok. Although TikTok is owned by China's ByteDance, the TikTok side of operations (TikTok is known as Douyin in China and is a separate legal entity) takes pains to distance itself from China as much as possible with most of its operations being run out of Los Angeles. ByteDance also established an Irish subsidiary, TikTok Technology Ltd, last year and is actively recruiting for a number of roles in Dublin.
TikTok has been installed nearly 1.5 billion times since launching in 2017. Global downloads for the app surpassed Instagram and Snapchatthis year, according to App Annie.
All this comes after a report that the US Navy had banned TikTok from government-owned devices, and any device that had TikTok installed would be prohibited from accessing the Navy intranet. Recently, TikTok was part of the military's recruitment campaign directed towards high school students.
It's unclear as to whether moving the company's operational headquarters out of China would shield it from Beijing's perceived interest in harvesting user's data via the app. The Chinese telecom giant Huawei is facing a similar conundrum as authorities in nations around the world are concerned that it might be a trojan horse for China's intelligence service. For its part, and there are parallels to ByteDance's gambit: Huawei says that its local subsidiaries would follow the law of their host nations.
But this line of logic has its critics. Donald Clarke, a Professor of Law at George Washington University, and author of a research paper criticizing Huawei's claims of independence told Wccftech when discussing Huawei that there's still an 'umbilical cord' of ownership.
"The Chinese parent [company] must do as it’s told by Chinese authorities, and if the Chinese authorities tell the parent to cause the subsidiary to act in some way, it will have to do so. The wholly-owned sub is dominated by the parent; by virtue of the ownership relation, it has to do as it’s told," he explained to Wccftech.