Douyin and TikTok owner Bytedance has established a joint venture (JV) with Shanghai Dongfang Newspaper Co., a state-owned media group, for short video licensing on its content platforms, Reuters reported.
Why it matters: US lawmakers are scrutinizing Bytedance’s short video platform TikTok for potential privacy and national security risks it may pose as a subsidiary of a Chinese company.
- Bytedance has ramped up its efforts to separate TikTok from its Chinese operations in an attempt to reassure US lawmakers of the app’s independence and security practices.
Details: Named Pengpai Audio Visual Technology Co., the joint venture was established on Dec. 10 in Shangdong Province with a registered capital of RMB 10 million, according to Chinese business research platform Tianyancha.
- The joint venture is allowed to provide services such as blockchain technology-related and artificial intelligence software, according to its registration information.
- However, a Bytedance spokesperson told TechNode that the company will focus mainly on short video digital rights.
- Beijing Liangzi Yuedong Technology Co., a Bytedance subsidiary, owns 49% of the joint venture, while Shanghai Dongfang Newspaper Co. owns 51%.
- Forming partnerships for content licensing is common, a person familiar with the matter told TechNode, while forming a JV for access to content is not.
- Shanghai Dongfang Newspaper Co. is most known for its online newspaper ThePaper.cn.
Context: US senators have long considered Bytedance’s potential ties to the Chinese government a threat to the freedom of speech and data safety on TikTok.
- Republican Marco Rubio in October requested the Committee on Foreign Investment in the United States (CFIUS) to review Bytedance’s 2017 acquisition of short video app Musical.ly, which was merged with TikTok, citing concerns that the app could be used to censor content at the request of the Chinese government.
- Also in October, Senate Minority Leader Chuck Schumer and Republican Senator Tom Cotton asked for a separate review of the potential national security risks posed by TikTok for similar concerns.
- Senator Josh Hawley also questioned Bytedance’s ties with the Chinese Communist Party and whether there is information sharing between them.
- Bytedance has repeatedly denied the allegations, stating that the company stores all US user data in the US and Singapore and does not remove content at the request of the Chinese government.