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Summary
- TikTok CEO Kevin Mayer resigned on Wednesday, days after Trump administration ordered parent company ByteDance to sell its US-based assets within 90 days, citing national security risk.
- Mayer joined TikTok in May and was expected to smoothen the creases between Washington and the Beijing-based tech company.
- Instead, he was embroiled in the growing scrutiny of Chinese apps over and a geopolitical fight between the two nations.
- By resigning, Mayer has removed himself from the line of crossfire between Washington and ByteDance.
- Investors are bracing up for more anti-China turbulence and trade hiccups in the run-up to the US polls in November.
(Image credit: Pixabay)
Less than four months into his role, TikTok Chief Executive Officer (CEO) Kevin Mayer Wednesday (August 26) quit under pressure from Trump administration that has cranked up the heat on Chinese companies recently. Senior ByteDance executive Vanessa Pappas will take his place on an interim basis.
Mayer’s exit comes within days of Trump administration ordering ByteDance to sell its US-based assets, citing national security risk over user data.
Why did TikTok CEO Kevin Mayer Resign?
Mayer’s resignation comes right before the looming US ban, choreographed by the Trump administration, which threatens the future of the app.
In an internal email to employees, Mayer alluded to the sharp changes in the current political ecosystem that has led to wide “corporate structural changes” and questioned the global position he “signed up for”.
Mayer had arrived at TikTok in May after a decade-long stint at The Walt Disney Co. where he led the acquisition for Pixar Animation Studios, Twenty-First Century Fox and Marvel Entertainment.
ByteDance, the parent company of TikTok, was banking on Mayer to streamline relations between the Beijing-based tech company and Washington and enforce the notion that TikTok is a separate entity.
Instead, Mayer was embroiled in the growing scrutiny of the Chinese app over alleged security threat and dragged into the business of breakup.
The former CEO almost ended up being a pawn, stuck in a geopolitical fight over technology and trade between a Chinese tech giant and the United States, that has adopted a staunch anti-China rhetoric. By resigning, Mayer has removed himself from the line of crossfire between Washington and ByteDance.
In a separate email, ByteDance founder Zhang Yiming said the company is working to resolve global issues, especially in India and the US. India was the first nation to ban the lip-syncing video app, along with 58 other Chinese apps, following border tension between the two nations that led to fatalities in armies on both sides for the first time in decades.
ByteDance has sued the Trump administration in retaliation, claiming that the actions are politically motivated.
The Anti-Chinese Sentiment
Recent polls show an anti-China sentiment is running high in the American markets, right ahead of the US elections set to be held in November this year.
Apart from TikTok, the White House has leveled sanctions against other Chinese companies including Tencent Holdings, WeChat and Huawei Technologies on national security grounds and alleged connection to the Chinese government. Washington is also pushing other Western nations to ban or limit the influence of Chinese technologies citing espionage and data privacy concerns.
READ: US-China clash and TikTok controversy
The ongoing cold war between US and China deteriorated with the outbreak of the global coronavirus pandemic that originated in Chinese city of Wuhan. Washington has been vocal about Bejing’s mismanagement of the virus, which has caused several global economies to contract.
Another common perception suggests China is repressive on home soil but grows stronger beyond its borders.
This perception is not completely unfounded.
China has continued to aggressively block foreign tech platforms such as Google and Facebook at home while its own tech and products enjoyed full access to open international markets. Another widespread conviction is China is quick to steals innovations and technologies to serve its own purpose.
China’s censorship and handling pro-democracy protests in Hong Kong has worsened the situation.
READ: How Anti-Chinese Sentiments Are Shaping Facebook vs TikTok Battle
What now?
Amid the free fall of US-China bilateral relations and increased hardline stances, investors are bracing up for more turbulence and trade hiccups in the run-up to the US polls in November and as Trump seeks re-election.
TikTok was the second most downloaded app of 2019, right behind Facebook-owned WhatsApp and ahead of Facebook-owned Messenger. The app is quite popular among teenagers and Generation Z, with over 100 million users in the States alone.
US has claimed TikTok is sharing user data with Beijing, an allegation vehemently denied by ByteDance. The Chinese tech giant claims the US user data is stored on servers in Virginia and Singapore.
READ: The TikTok Talk - Microsoft's Efforts around Pocketing a Big deal
With White House’s push, ByteDance has been seeking a buyer for TikTok’s US arm. Sources say Microsoft, Oracle and others bidders sought out a deal, with negotiations hovering between $20 billion to $50 billion. But nothing concrete has been etched.
