The future of TikTok after CEO Kevin Mayer resigns | Business | Economy and finance news from a German perspective | DW | 28.08.2020

Visit the new DW website

Take a look at the beta version of dw.com. We're not done yet! Your opinion can help us make it better.

  1. Inhalt
  2. Navigation
  3. Weitere Inhalte
  4. Metanavigation
  5. Suche
  6. Choose from 30 Languages
Advertisement

Business

The future of TikTok after CEO Kevin Mayer resigns

What began as a video platform for teens to share their antics is now the center of a major dispute between the United States and China. Ahead of a looming ban on the popular app, its CEO Kevin Mayer has quit.

Launched in 2017, the popular short-form video app TikTok is under fire from US President Donald Trump as the Chinese firm behind it, ByteDance, has been cited as a national security risk due to the vast amount of private data that the app is compiling on US consumers.

On Thursday, TikTok's chief executive Kevin Mayer quit over pressure to sell the video platform's US operations, just three months after the former senior executive at Walt Disney Company had joined TikTok. Mayer's resignation came after Trump threatened to ban TikTok in the United States if it wasn't acquired by an American firm by September 15.

"He [Mayer] took the job expecting a global market, but the deal on the table is for a market limited to four countries, the US, Canada, Australia, and New Zealand," James Andrew Lewis, senior vice president at the Center for Strategic and International Studies (CSIS), told DW.

"He went from an 800-million-person market, he could grow to a billion, to a 150 million market The job changed in ways that made it unattractive and we don’t know what any new owner may plan for the CEO," he says.

A graphic of TikTok's soaring popularity in the United States, showing the apps monthly downloads surpassing that of rivals like Facebook, Instagram, YouTube and Snapchat

Is TikTok dangerous?

The Trump administration has highlighted how TikTok, like all other Chinese companies, has to hand over data to Chinese authorities under a 2017 intelligence law introduced by President Xi Jinping.

As smartphone apps like TikTok collect so much information ― and in some instances, all your communication ― they are a major risk to privacy, so much so that Washington began an investigation into the video app last month.

One senator described TikTok as "China's best detective."

CSIS' James Andrew Lewis also thinks that China is "the world’s largest police state," making former Communist East Germany's infamous Stasi secret police "look like amateurs." As Beijing is expanding mass surveillance to include non-Chinese citizens, ByteDance couldn't possibly say no if Chinese rulers asked them to "share data, implant spyware, or some other trick."

"No one in their right mind should trust Leninists, especially after Hong Kong," he added.

As well as US scrutiny, the app was recently banned in India. Germany, on the other hand, says it has seen no signs that the app is a security risk and is courting Tiktok to set up its European operations in Frankfurt.

Who is lining up to buy Tiktok US?

Initially, Microsoft said it would try to buy TikTok's operations in North America and Australasia as it would give the US tech giant access to millions of young users, addicted to the video app.

Tech industry pundits say Microsoft missed the mobile revolution and a TikTok acquisition would allow it to play catch up.

The firm insisted that all private data of TikTok's American users would be "transferred to and remain in the United States." 

US retail giant Walmart is also interested in buying TikTok US, saying in a statement released on Friday it would seek to partner with Microsoft in the attempt. The deal would allow it to face off competition from its e-commerce rival Amazon.

Other potential buyers include US tech company Oracle and short-messaging app Twitter.

Watch video 02:34

How Does TikTok Make Money?

How have TikTok and China responded?

TikTok and one of its employees have separately sued the Trump administration over its order banning the app, calling it a pretext to fuel anti-China rhetoric as the US president seeks reelection. 

TikTok's parent company ByteDance has repeatedly rejected accusations that the app is a national security threat, saying in a recent statement it has taken "extraordinary measures to protect the privacy and security of TikTok’s US user data."

The company also said the proposed ban was part of a "broader campaign of anti-China rhetoric" ahead of the US presidential election in November, where Trump is seeking a second term. 

China’s state-run media outlets have widely condemned the move, describing the sale of the US operations "theft" and "open robbery" of Chinese technology. 

James Andrew Lewis believes, though, the US campaign against China would have continued regardless of the imminent election. He argues the Chinese have "overplayed their hand," and says that no matter who wins the election US pressure on pressure on China "is not going to stop."

"The Chinese will look for ways to retaliate, and American companies may be hurt, but one thing most Americans agree on is the need to push back against an authoritarian China," he concludes.

Watch video 03:09

Is a trade dispute now moving into the digital world?

Audios and videos on the topic