US official presses for review of Bytedance’s Musical.ly acquisition
Oct 10, 2019
US Senator Marco Rubio on Wednesday requested that the Committee on Foreign Investment in the United States (CFIUS) review Bytedance’s 2017 acquisition of short video app Musical.ly, citing concerns that Bytedance apps are increasingly used to censor content, Reuters reported.
Why it matters: As trade tensions between China and the US intensify, an increasingly wider swath of Chinese companies are facing scrutiny by US regulators.
“TikTok US is localized, adheres to US laws, and stores all US user data in the US. Our content and moderation policies are led by our US-based team and are not influenced by any foreign government. The Chinese government does not request that TikTok censor content, and would not have jurisdiction regardless, as TikTok does not operate there.”
—TikTok spokeswoman to TechNode
Details: In a letter to the CFIUS chair, Treasury Secretary Steven Mnuchin, Rubio said that Chinese apps are more frequently being used to silence open discussion of topics considered sensitive by the its government.
- Rubio said that China is using apps such as TikTok to advance its foreign policies and control on freedom of speech.
- CFIUS reviews mergers and stock purchases to prevent harm to national security, and has been more closely scrutinizing Chinese investments in the US, the Reuters report said.
- It is unusual for CFIUS to use censorship concerns to review an acquisition, according to the Reuters report citing lawyers familiar with the committee.
- Rubio previously criticized the National Basketball Association for expressing regret over a now-deleted tweet by Houston Rockets general manager Daryl Morey, which voiced support for Hong Kong anti-government protestors.
Context: Co-founded by current Bytedance executive Alex Zhu in 2014, Musical.ly was acquired by Bytedance in December 2017 for nearly $1 billion.
- In August 2018, Bytedance scrapped Musical.ly and moved its users to an updated version of its own short video platform TikTok.