After the transfer of control over American TikTok to a joint venture with the participation of investors, the platform’s ties with the Chinese ByteDance were largely preserved. Employees continue to use its internal services and interact with the global TikTok team. found out Politico. This calls into question the extent to which the US authorities managed to ensure the independence of the new structure.
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In the final months before the deal closed, TikTok was in chaos, with employees receiving little information about the sale’s progress and receiving news mostly from the media. The deal was closed in January, but much remained the same. Employees of the new company TikTok USDS Joint Venture continue to discuss new functions of the application together with foreign colleagues, exchange information about dangerous trends and agree on the rules of the platform.
However, the division did not cover all American businesses. ByteDance retained its commercial businesses, including advertising and e-commerce, as well as a 19.9% stake in the joint venture and a seat on the board of directors. The new structure received powers for data protection, security of the recommendation algorithm and content moderation for American users.
American TikTok continues to use Lark, a service messenger developed by ByteDance. It recently added the AI assistant Aime, created by a Chinese company. Management encourages its use, but warns employees that it is prohibited to transfer confidential data of American users to it, the source told Politico.
Control that such data does not end up in Lark is largely entrusted to the employees themselves, which leaves a risk of errors, the publication notes. In a 2024 court document, the US Department of Justice already alleged that TikTok employees sent significant amounts of restricted data from American users through this service. TikTok US, for its part, says Americans’ data is segregated by law and cites safeguards, code reviews and independent audits.
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The company believes that maintaining working connections is necessary for the normal operation of the application: American bloggers must find an audience around the world, and the business must continue to operate in the international market. Some restrictions still appeared. Employees of the American company can visit global TikTok offices on other floors of the same building only when accompanied by colleagues and without laptops. They also changed their email addresses, and replaced ByteDance stock with cash bonuses based on operating profits.
American authorities have been studying TikTok’s ties to China for years. Concerns concerned both the possible access of the Chinese government to user data and the influence on the audience through the recommendation algorithm. In 2022, TikTok introduced the Project Texas program, formed a US Data Security division and promised to store Americans’ data on Oracle servers. The current scheme largely repeats this project, according to former and current employees of the company.
TikTok US says it will retrain, test and update its recommendation algorithm on data from US users, and the algorithm itself will be secured on Oracle’s cloud infrastructure in the US. However, the terms of its licensing and the extent of further involvement of ByteDance engineers remain opaque. It is also unclear what role the US administration plays in monitoring the implementation of the deal, the legality of which is being challenged in court, Politico writes.
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Answers to some of the questions were expected at a hearing of the House China Committee on September 15, but TikTok withdrew at the end of August. Committee chairman John Moolenaar attributed this to the company’s reluctance to discuss child protection; TikTok itself has not publicly explained the reason. A new hearing date has not yet been set.
The complexity of the separation was previously recognized even by the current head of TikTok US, Adam Presser. In a 2024 court filing, he noted that the platform’s code was worked on by thousands of engineers around the world, including in China, and it would take at least several years for a new team to learn it and work on it themselves. However, the White House insists that the deal ensured control of American investors and complete protection of user data.
After the split, TikTok began seeking to lift bans on the use of the application on government devices. Federal authorities and North Dakota have already lifted restrictions, but more than 30 states remain in place. At the same time, the company faces numerous lawsuits over exposure to children and adolescents. In August, TikTok agreed to settle a US Department of Justice lawsuit on the protection of children’s data for $400 million, but in September a judge questioned part of the agreement. For now, the debate over the safety of minors has pushed the issue of Chinese influence into the background, Politico concludes.
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