TikTok’s top brass is considering separating the video-sharing app from its Chinese parent company ByteDance to help assuage national security and privacy concerns.
The divesture could result in a sale or an initial public offering of TikTok. However, it would only be considered a last resort and only pursued if the company cannot get its existing proposal with national security officials approved.
However, even then the Chinese government would have to agree to such a deal, according to sources familiar with the matter who spoke to Bloomberg.
The company’s US business could be worth as much as US$50 billion (AU$75 billion) based on social media multiples and other important factors.
TikTok has been facing heightened scrutiny over its data processing from politicians in the US and Australia. Earlier this month, it was revealed that 25 government departments and agencies had banned the app from being installed and used on government-issued devices.
In response to the threats, TikTok agreed to implement a number of changes to its data processing rules for US customers called Project Texas.
“Neither a ban of TikTok nor a divestiture of TikTok from ByteDance does anything to address national security concerns about data transfers,” said Brooke Oberwetter, a spokesperson for TikTok.
“Under Project Texas, TikTok data for our US users would be held to a significantly higher security standard than any comparable American company.”
It also brought in Oracle to hos its US data and review its software. It also appointed a three-person government-approved oversight board.
TikTok chief executive officer Shou Chew has also been asked to testify before a House committee next week about the app’s data privacy and security practices, and the company’s relationship with the Chinese Communist Party.
