TikTok has officially transitioned its American operations to a new U.S.-based company on Jan. 22 to comply with federal laws aimed at addressing data privacy and national security concerns.
The new company, TikTok USDS Joint Venture LLC, is majority-owned by U.S. investors, including Oracle, Silver Lake, and MGX, which together hold 80.1%. In contrast, TikTok’s parent company, ByteDance, has only 19.9%.
This joint venture was a result of avoiding a complete ban under the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA). PAFACA is a federal law that requires apps deemed controlled by a foreign adversary to be divested or banned.
The U.S. has the largest number of TikTok users of any country, which is another reason ByteDance was willing to create this joint venture.
For many TikTok users, the technical change means little in their everyday experience, though creators and users alike share uncertainty about it.
For Tiree Hanson, a junior at Casa Grande High School who uses TikTok daily, the venture was mainly inconsequential in her typical routine.
“I feel a bit more comfortable using the app now, but I don’t really focus on who’s running all the background stuff on my phone,” Hanson said.
For creators, the shift impacts not only entertainment but also their ability to build a community. Daria Shkolnik, a junior at Carlmont High School who has amassed over 1,600 followers by creating “Stranger Things” related videos, said she only learned about the new U.S. ownership change after the fact.
“I’d rather have TikTok transition to the United States than be banned. I really hated it when it was banned last year. A lot of the followers are also friends, so I follow them back, chat with them, and exchange videos, which kind of forms a connection online. I’ve talked to a lot of ‘Stranger Things’ fans from many different countries, and if this joint venture limits my exposure and communication with them, I’m really going to be unhappy,” Shkolnik said.
Despite concerns, Shkolnik said her trust in TikTok’s platform remains mostly unchanged and that she feels more confident about its accessibility in the U.S.
“If I don’t see any physical changes on the app, then I will probably forget about the ownership change. I also feel 100% more confident now because the government has been threatening to ban TikTok for a while. Hopefully, this ownership change will make them leave the issue alone,” Shkolnik said.
TikTok’s influence is especially pronounced among young users. High school students and young adults are the key demographic as the platform restructures its U.S. operations under the new joint venture.
Emily van Sebille, a Carlmont teacher with over 40,000 TikTok followers, said that professional considerations shape her content.
“I have always been conscious about what I post, because of my profession as an educator. I try not to use inappropriate or disparaging language, because I never want my students to feel like they can’t trust me. But I would be even more cautious with what I post now that it is more U.S.-based because I know that our administration is starting to look into people who have been critical of their administration. So I would be even more mindful of where my professional life intersects with what I might post,” van Sebille said.
Many people have been unsure about why this new venture was even necessary in the first place.
“I don’t know why they needed to create this new company. It seems like it was a weird power move to me. I don’t know why that was a priority when there are so many other things that are priorities. Maybe there was some good in it, but I haven’t found the need yet,” van Sebille said.
Some are also worried about potential changes to TikTok’s algorithm.
“I think the algorithm will become more siloed and similar to things like Facebook and Instagram. On those platforms, you are very much put into a vein, and you don’t get to see much of the other side of that. Certain topics are being suppressed, and it may or may not happen more, and there’s no way to prove it. It’s all just like conjecture,” van Sebille said.
