Feeling pressure from governments around the world, TikTok parent company ByteDance has released changes to its corporate structure ahead of a Congressional inquiry into the social-media company’s data security and relationship with the Chinese government.
Key Details
- A newly updated corporate chart shows the relationship between various corporate entities within the ByteDance organization.
- The new chart indicates that TikTok is one of seven subsidiaries under ByteDance.
- On the website, ByteDance describes the chart as representing the company’s structure as of February 2, 2023. The updated chart was added to the website on March 15, according to Fortune’s review of internet archives.
- This change to the corporate structure comes just a few days before TikTok CEO Shou Zi Chew is scheduled to appear before Congress.
Why it’s news
TikTok’s close connection to China has raised concerns about U.S. data security. Multiple states have banned the app on government devices, and several lawmakers have suggested an outright ban in the U.S. Aside from security concerns, critics of the social-media app also worry about its ability to spread propaganda and misinformation.
To stay active in the U.S., TikTok has reportedly considered separating from ByteDance, though this move would be a last resort and require permission from Beijing officials. TikTok representatives have repeatedly denied storing U.S. user data, Fortune reports.
The new corporate structure shows that the U.S. branch of TikTok is made up of several U.S. entities. According to the chart, the only direct connection between China and ByteDance is through the Douyin Group. Douyin is the Chinese version of TikTok. This video-sharing app operates under different rules than TikTok within Chinese borders.
Under the Douyin Group, “China State-Owned Enterprises” have a 1% stake in a division called Beijing Douyin Co Info Services, Ltd. This entity is connected to ByteDance through contractual agreements rather than equity interest.
Beijing Douyin Info Services was previously called Beijing ByteDane Technology. A ByteDance representative told Fortune that the division is the name of ByteDance’s China business. The spokesman added that Beijing Douyin Info services “is not and had never been the parent company” of ByteDance.
Chew is scheduled to speak in the House Energy and Commerce Committee this Thursday regarding TikTok’s data security and its connections to the Chinese Communist Party. The updated corporate chart conflicts with the House Committee’s memo, which refers to Beijing ByteDance Technology as interchangeable with ByteDance Ltd.
This updated corporate structure is the first available in some time. The previously available corporate structure was removed from the website at the beginning of 2021.
Here is the new corporate structure:
Backing up a bit
TikTok CEO Shou Zi Chew is expected to testify before the House Energy and Commerce Committee regarding the social-media company’s privacy policy, the app’s effect on children, and the company’s relationship with the Chinese Communist Party.
Committee Chair Cathy McMorris Rodgers announced that the TikTok CEO had been asked to appear before the committee to address lawmakers’ concerns with the social-media company.
Rodgers claims that TikTok has knowingly allowed the Chinese Communist Party to access user data through the app.
“We’ve made our concerns clear with TikTok. It is now time to continue the committee’s efforts to hold Big Tech accountable by bringing TikTok before the committee to provide complete and honest answers for people,” Rogers says.
Chew is set to appear before the committee on March 23.