TikTok CEO to tell lawmakers its parent company is ‘not an agent of China’

By Brian Fung, CNN

TikTok CEO Shou Chew plans to tell US lawmakers that the app’s parent company, ByteDance, does not work for the Chinese government as he seeks to avert a US ban and reassure policymakers TikTok poses no national security threat.

The remarks, which include broad promises to protect US user data, to keep teens safe and to remain free from any government influence, mark the company’s most visible attempt yet to shake off concerns about the potential for foreign spying that have spooked governments worldwide.

“Let me state this unequivocally,” Chew will say, according to a copy of his remarks released by a key House panel. “ByteDance is not an agent of China or any other country.”

Chew is scheduled to appear before the House Energy and Commerce Committee Thursday, in what will be his first public testimony to Congress as TikTok’s chief executive. More than 150 million Americans use TikTok every month, Chew will say, emphasizing that US content creators on TikTok punch above their weight and that their material is disproportionately consumed by TikTok’s 1.5 billion users worldwide.

In his written remarks, which span nearly a dozen pages, Chew defends ByteDance’s corporate structure and outlines steps the company has taken, and plans to take, to resolve fears the Chinese government could gain access to TikTok user data through its potential influence over ByteDance. Among those steps is a vow to “firewall” US user data from “unauthorized foreign access.”

Drawing a familiar page from Silicon Valley’s lobbying playbook, Chew also plans to present TikTok as a boon for free expression and entrepreneurs while also appealing to antitrust concerns surrounding Big Tech.

“We do not believe that a ban that hurts American small businesses, damages the country’s economy, silences the voices of over 150 million Americans and reduces competition in an increasingly concentrated market is the solution to a solvable problem,” Chew will tell lawmakers.

ByteDance was founded by Chinese nationals but their shares now represent only 20% of the company’s overall private ownership, according to Chew’s testimony, with the rest comprised of employee stock and global institutional investors such as Blackrock and Sequoia.

As part of a $1.5 billion security overhaul known as Project Texas, TikTok last month began deleting US user data from its proprietary servers based in Singapore and Virginia, Chew will say. The deletion process is expected to wrap up later this year.

New TikTok data created by US users is already being stored on cloud-based servers operated by the US tech giant Oracle, a change that took effect last month, according to the testimony.

A recently formed TikTok subsidiary known as US Data Security (USDS) will be solely responsible for handling Americans’ personal information going forward, Chew will say. USDS already has nearly 1,500 full-time employees and the company plans to hire more.

“Our commitment under Project Texas is for the data of all Americans to be stored in America, hosted by an American headquartered company, with access to the data controlled by USDS personnel,” Chew will say, adding: “Under this structure, there is no way for the Chinese government to access it or compel access to it.”

While there may be some employees outside of USDS that will be able to access the data for legal and compliance reasons, according to Chew’s testimony, that access must be specifically approved by USDS.

“No employees of Beijing Douyin Information Service Co., Ltd. have access to any databases that contain any protected U.S. user data,” Chew will add, telling lawmakers that the hiring criteria for USDS employees will be “clear” and that it foresees the data access policies being subject to third-party audit.

US officials have threatened to ban TikTok unless its Chinese owners divest their shares. But, Chew will say, forcing a divestiture would not necessarily lead to the creation of data access controls that TikTok says will resolve the underlying national security concerns.

“Bans are only appropriate when there are no alternatives. But we do have an alternative,” Chew will say.

Chew will also condemn a recently disclosed incident in which ByteDance employees were fired for spying on certain US journalists. Chew plans to describe the incident as a “misguided attempt to trace the source of a leak of confidential TikTok information.” TikTok informed the Energy and Commerce Committee about the spying “within moments of informing our employees,” Chew will add. The Justice Department is reportedly investigating the incident.

Chew will say TikTok also supports legislation to create a national data privacy law affecting all US businesses, as well as potential updates to a child-specific privacy law known as COPPA, or the Children’s Online Privacy Protection Act. His written testimony also outlines TikTok’s moves to keep users safe with content moderation, highlighting that the company spent $1 billion in 2021 on trust and safety and reflecting TikTok’s largest US labor expense.

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