TikTok is one of the most popular social networks in the world, with nearly 7 out of 10 people using it. The app’s parent, ByteDance has been under political pressure for years in the United States, over issues of data security and influence.
Initially, these concerns were raised during Donald Trump’s first presidency when US officials said that TikTok might allow Chinese authorities to access American users’ data. The lawmakers also expressed concerns about the manipulation of content and foreign influences on public opinion.
TikTok: Why US lawmakers are targeting it
Concerns from the US government focused on TikTok’s ownership structure, and data handling practices. The platform has more than 200 millions users in America. Lawmakers argued that it posed a security threat.
ByteDance has launched Project Texas to address these problems. Oracle, a technology company based in the United States, was responsible for the storage of US users’ data on Oracle servers. TikTok has also relocated parts of the leadership and operation outside China in order to lessen political pressure.
Congress, despite these efforts in the 2024 passed a bill that threatened TikTok’s ban unless ByteDance lowered its control of US business.
The US TikTok deal
A newly concluded deal has separated TikTok’s US business from its global operations. Oracle is part of a new consortium that oversees the American app.
ByteDance will no longer be in control of the US algorithm or data that TikTok uses. It instead licenses technology to the US entity. Trump Administration has valued the licensing agreement at 14 billion dollars.
ByteDance continues to have a strong influence on TikTok in the US. However, there are stricter regulations and restrictions placed upon ByteDance.
The impact on creators, advertisers, and revenue
Analysts believe the US-only algorithm will alter how content is spread. Videos that were popular in one area could easily go viral around the world. This global reach could be weakened by a US-only system.
It could have an impact on creators, advertisers, and brands. Some companies may have to invest more money to reach American consumers, while other creators might see a decrease in engagement.
India and Huawei: Lessons Learned
ByteDance faced challenges similar to those that ByteDance faces today. India, which was experiencing rising tensions between Beijing and New Delhi in 2020, banned TikTok as well as hundreds of Chinese apps. ByteDance grew despite losing its biggest market.
The Chinese tech expansion is a new reality
ByteDance controls the domestic version of TikTok, Douyin in China. Douyin is still profitable, and the company has a strong political alignment. This gives it stability in China.
ByteDance invests in data centers, cloud services and artificial intelligence at the same time to decrease reliance on apps that are based solely on advertisements.
Numerous analysts claim that the TikTok controversy is not just about data protection. The debate is becoming more about controlling culture, speech and influence. In an age of increasing geopolitical tension, the US TikTok agreement may serve as a model for Chinese technology firms to operate internationally.
