Who owns TikTok’s parent company? Despite what Brian Kilmeade says, it's not the Chinese government

"Fox & Friends" co-host Brian Kilmeade and Sen. Rand Paul, R-Ky., argued on live television about who owns TikTok’s parent company, ByteDance Ltd. Their heated exchange came a day after the U.S. House passed a bipartisan bill that could lead to the popular app being banned in the U.S.

The bill would require ByteDance, a China-based company, to sell TikTok, which has 170 million U.S. users, to a non-Chinese owner within six months or face a U.S. ban. The Senate would also need to approve the bill for it to move forward, though its fate there is uncertain. President Joe Biden has said he would sign the legislation if it reaches his desk. 

During the March 14 exchange with Paul, Kilmeade said, "Who owns that company? ByteDance? ByteDance is owned by China."

"No, it’s not," Paul replied. "See that’s a lie. … You’re defaming the company."

Paul said three times during the interview that 60% of ByteDance is owned by international investors, 20% is owned by its Chinese co-founders and 20% is owned by employees, including 7,000 Americans.

"It’s a complicated ownership, but it’s not owned by the government," Paul said.

Kilmeade then asked who owns the TikTok app’s algorithm."TikTok owns their own algorithm and it’s not in China," Paul responded.

"Who owns TikTok?" Kilmeade countered. "ByteDance. And who owns ByteDance? The Chinese government."

"No they don’t. See, you just told a lie, Brian," Paul responded.

Watch the exchange between Kilmeade and Paul above. (YouTube)

According to TikTok, Paul is correct. An expert on China told PolitiFact that it’s hard to independently verify. 

Kilmeade did not respond to a request for comment sent to a Fox News spokesperson.

PolitiFact has a partnership with TikTok to counter inauthentic, misleading or false content. 

A TikTok spokesperson, in an email to PolitiFact, confirmed Paul’s numbers about its ownership structure. TikTok also uses the same figures that Paul cited on its webpages about its ownership.

The Associated Press reported that ByteDance is based in Beijing, but registered in the Cayman Islands. TikTok has global headquarters in Los Angeles and Singapore and offices around the world, including in New York City, but TikTok says ByteDance does not have a single global headquarters.

Kenton Thibaut, a senior resident China fellow at the Atlantic Council’s Digital Forensic Research Lab, said that because ByteDance is a privately owned company, what is known about its ownership structure comes from the company itself.

"Its ownership is not possible to verify," Thibaut said. "It has, however, had to provide disclosures in the past."

She said ByteDance has provided disclosures to Washington, D.C., courts; to funders; and in Chinese government documents. Tibaut said those disclosures show that 60% of TikTok is owned by global investors, as TikTok told PolitiFact and Paul told Kilmeade.

The TikTok spokesperson also told PolitiFact that ByteDance’s five-person board of directors includes three Americans: Arthur Dantchik, co-founder of trading company Susquehanna International Group; William Ford, CEO of investing company General Atlantic; and Philippe Laffont, founder of hedge fund company Coatue Management.

In a March 11 letter, TikTok Vice President of Public Policy Michael Beckerman wrote to Reps. Mike Gallagher, R-Wis., and Raja Krishnamoorthi, D-Ill., in response to a letter from the lawmakers, who said the Chinese government controlled ByteDance. Both Gallagher and Krishnamoorthi serve on the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party.

"TikTok is not owned or controlled by the Chinese government," Beckerman wrote. "The ultimate parent company of TikTok Inc. is ByteDance Ltd., a privately-owned holding company established in the Cayman Islands. ByteDance Ltd. is majority owned by investors around the world, and the rest of the shares are owned by the founding team and employees around the world."

According to The Wall Street Journal, ByteDance agreed in 2021 to allow the Chinese government to take a 1% ownership stake known as a  "golden share" at one of its China-based subsidiaries, Beijing Douyin Information Service Co., which runs Douyin, an app available in China that’s similar to TikTok. (TikTok is not available in mainland China.) China is increasingly taking "golden shares" at China-based companies, giving the government board seats, voting power and a say in business decisions, the Journal reported.

Thibaut also said that the government-owned China Internet Investment Fund has a 1% share in Douyin, and China's Central Cyberspace Affairs Commission has a board member on Douyin. That has raised suspicions ByteDance would allow China to have influence over the company's operations, but we don’t know a lot about how or if the Chinese Communist Party uses its share to control company decisions, Thibaut said.

TikTok called the Chinese government’s 1% share in Douyin a "common arrangement" under Chinese law. It has no bearing on ByteDance’s global operations, including TikTok, it said.

Some legislators and U.S. officials have raised concerns that Chinese national security laws could require ByteDance to turn over TikTok data about American users to the Chinese government.

President Joe Biden in December 2022 signed a law barring federal employees from using TikTok on government-owned devices, with limited exceptions. States, local governments and universities have instituted similar TikTok bans on devices they own.

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There have been previous issues, such as when ByteDance employees accessed data of Forbes journalists in 2022 and used it to track their movements. There was no evidence that China’s government compelled ByteDance employees to access the data to discover who was leaking information to the press about ByteDance’s links to China, Forbes reported. 

In March 11 testimony before a Senate committee, FBI Director Christopher Wray said TikTok’s  "parent company is for all intents and purposes beholden to the CCP (Chinese Communist Party)."

Sen. Marco Rubio, R-Fla., asked if because ByteDance owns TikTok's algorithm, regardless of where TikTok's user data is stored, the Chinese government could ask ByteDance for the U.S. user data used to make the algorithm work, to which Wray said, "That's my understanding."

Exchange between Sen. Marco Rubio, R-Fla., and FBI Director Christopher Wray about TikTok. (CBS News, YouTube)

Thibaut said "we cannot know" whether the Chinese government could force ByteDance to provide it with U.S. TikTok user data.

In a February report about TikTok, Thibaut and two colleagues wrote that "if ByteDance or TikTok executives were to refuse an order directing them to allow Chinese intelligence agencies to use TikTok for 'national intelligence efforts,' these executives would likely face punishment."

TikTok denies that China could force ByteDance to turn over U.S. user data. Beckerman’s letter addressed some of those concerns, saying that since January 2023, new U.S. TikTok data has been stored in the Oracle Cloud in the U.S. and controlled by TikTok’s U.S. subsidiary,  U.S. Data Security. Only the Data Security team employees can access U.S. user data, it said. There are limited exceptions for legal and compliance reasons, which does not include adhering to China’s national security law, it said.

The company’s U.S. data-storing plan is known as Project Texas and began in 2022 as a way to assure U.S. users their data was secure.

In March 2023 testimony before a House committee, TikTok CEO Shou Zi Chew, who is a native of Singapore, told legislators, "ByteDance is not an agent of China or any other country" and that under the Project Texas structure, there is no way for China’s government to compel access to U.S. users’ data.

Kilmeade said that the Chinese government "owns" TikTok’s parent company, ByteDance Ltd.

Information on ByteDance, a privately owned company, comes from TikTok and is difficult to independently verify. TikTok said 60% of ByteDance is owned by global investors, including U.S.-based investors, 20% by its Chinese co-founders and 20% by its employees, including thousands in the U.S. The company’s vice president has attested to that structure in a letter to Congress.

An expert also told us that TikTok has included the same global investor ownership percentage in disclosures to Washington, D.C., courts; funders; and in Chinese government documents. 

China holds a 1% ownership stake in one of ByteDance’s China-based subsidiaries, Beijing Douyin Information Service Co., which runs an app in China similar to TikTok.

Although many U.S. officials are concerned that China could exert influence over ByteDance, and thus over TikTok, available evidence does not support the claim that ByteDance is owned by the Chinese government. Kilmeade also offered no evidence to support his statement.

In the absence of evidence supporting the claim, we rate it False.

PolitiFact Researcher Caryn Baird contributed to this report.