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REPUBLICA PRESS
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Douyin (ByteDance)

TikTok’s CEO Navigates the Limits of His Power

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TikTok recently tried to tamp down concerns from U.S. lawmakers that it poses a national security threat because it is owned by the Chinese internet company ByteDance. The viral video app insisted it had an arm’s-length relationship with ByteDance and that its own executive was in charge.

“TikTok is led by its own global C.E.O., Shou Zi Chew, a Singaporean based in Singapore,” TikTok wrote in a June letter to U.S. lawmakers.

But in fact, Mr. Chew’s decision-making power over TikTok is limited, according to 12 former TikTok and ByteDance employees and executives.

Zhang Yiming, ByteDance’s founder, as well as by a top ByteDance strategy executive and the head of TikTok’s research and development team, said the people, who declined to be identified for fear of reprisals. TikTok’s growth and strategy, which are led by ByteDance teams, report not to Mr. Chew but to ByteDance’s office in Beijing, they said.

increasingly questioned TikTok’s data practices, reigniting a debate over how the United States should treat business relationships with foreign companies.

On Wednesday, TikTok’s chief operating officer testified in Congress and downplayed the app’s China connections. On Thursday, President Biden signed an executive order to sharpen the federal government’s powers to block Chinese investment in tech in the United States and to limit its access to private data on citizens.

a March interview with the billionaire investor David Rubenstein, whose firm, the Carlyle Group, has a stake in the Chinese giant. Mr. Chew added that he had become familiar with TikTok as a “creator” and amassed “185,000 followers.” (He appeared to be referring to a corporate account that posted videos of him while he was an executive at Xiaomi, one of China’s largest phone manufacturers.)

Jinri Toutiao. The two built a rapport, and an investment vehicle associated with Mr. Milner led a $10 million financing in Mr. Zhang’s company that same year, three people with knowledge of the deal said.

The news aggregator eventually became ByteDance — now valued at around $360 billion, according to PitchBook — and owns TikTok; its Chinese sister app, Douyin; and various education and enterprise software ventures.

By 2015, Mr. Chew had joined Xiaomi as chief financial officer. He spearheaded the device maker’s 2018 initial public offering, led its international efforts and became an English-speaking face for the brand.

“Shou grew up with both American and Chinese language and culture surrounding him,” said Hugo Barra, a former Google executive who worked with Mr. Chew at Xiaomi. “He is objectively better positioned than anyone I’ve ever met in the China business world to be this incredible dual-edged executive in a Chinese company that wants to become a global powerhouse.”

In March 2021, Mr. Chew announced that he was joining ByteDance as chief financial officer, fueling speculation that the company would go public. (It remains privately held.)

appointed Mr. Chew as chief executive, with Mr. Zhang praising his “deep knowledge of the company and industry.” Late last year, Mr. Chew stepped down from his ByteDance role to focus on TikTok.

Kevin Mayer, a former Disney executive, left after the Trump administration’s effort to sunder the app from its Chinese parent. China was also cracking down on its domestic internet giants, with Mr. Zhang resigning from his official roles at ByteDance last year. Mr. Zhang remains involved in decision making, people with knowledge of ByteDance said.

Mr. Chew moved to establish himself as TikTok’s new head during visits to the app’s Los Angeles office in mid-2021. At a dinner with TikTok executives, he sought to build camaraderie by keeping a Culver City, Calif., restaurant open past closing time, three people with knowledge of the event said. He asked attendees if he should buy the establishment to keep it open longer, they said.

a TikTok NFT project involving the musical artists Lil Nas X and Bella Poarch. He reprimanded TikTok’s global head of marketing on a video call with Beijing-based leaders for ByteDance after some celebrities dropped out of the project, four people familiar with the meeting said. It showed that Mr. Chew answered to higher powers, they said.

Mr. Chew also ended a half-developed TikTok store off Melrose Avenue in Los Angeles, three people familiar with the initiative said. TikTok briefly explored obtaining the naming rights of the Los Angeles stadium formerly known as the Staples Center, they said.

He has also overseen layoffs of American managers, two people familiar with the decisions said, while building up teams related to trust and safety. In its U.S. marketing, the app has shifted its emphasis from a brand that starts trends and conversations toward its utility as a place where people can go to learn.

In May, Mr. Chew flew to Davos, Switzerland, for the World Economic Forum, speaking with European regulators and ministers from Saudi Arabia to discuss digital strategy.

June letter to U.S. lawmakers, he noted that ByteDance employees in China could gain access to the data of Americans when “subject to a series of robust cybersecurity controls.” But he said TikTok was in the process of separating and securing its U.S. user data under an initiative known as Project Texas, which has the app working with the American software giant Oracle.

“We know we’re among the most scrutinized platforms,” Mr. Chew wrote.

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China’s Internet Antitrust Push Leads to Corporate Clashes

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China’s internet companies have also become accustomed to turning to the government. Their data and networks help the government surveil the public. They follow the official censorship guidelines diligently and help the state media blare propaganda. They have become an integral part of the Communist Party’s social control machine. Tencent and Baidu declined to comment, and Alibaba did not respond to a request for comment.

With the government waving the antitrust baton, they could become even more servile.

Last week, Tencent announced a $7.7 billion fund dedicated to what it called “sustainable social value innovations.” It would fund projects involving education, carbon neutrality and the revitalization of rural villages, many of which are pet topics of the party. Online, some commenters praised Tencent for its adroit politicking. One Weibo commenter quipped that Tencent was paying its antitrust fine in advance.

Alibaba used to be the most defiant in its dealings with the regulators, which once looked the other way as the e-commerce giant bullied its smaller competitors and vendors. As late as November 2019, an Alibaba executive defended its exclusionary practices in a meeting with the antitrust regulator. “There are always some competitors who speculate maliciously about the exclusive cooperation business model,” she said.

In October, Jack Ma, the Alibaba co-founder, publicly accused Chinese regulators of being too obsessed with containing financial risk. Days later, the authorities called off the initial public offering of Ant Group, Alibaba’s financial affiliate.

Alibaba’s attitude now couldn’t be more different. After the regulator imposed the $2.8 billion antitrust fine, the company said it “accepts the penalty with sincerity and will ensure our compliance with determination.” Mr. Ma has kept a low profile since October.

Still, talk is cheap, and the platforms have done little to show they are opening up. Tencent and Alibaba, for example, could start by allowing each other’s payment apps on their services. That would benefit consumers and show they are serious about following the law. That could also get the government off their backs.

But so far, none of these companies have announced substantial moves to correct anticompetitive practices. Instead, they are clashing and maneuvering through the halls of power.

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