Lawmakers Investigate Zoom's, TikTok's China Ties | PYMNTS.com
Safety and Security

US Lawmakers Seek Investigation Of Zoom And TikTok’s China Ties

Two members of Congress asked the U.S. Department of Justice (DOJ) Thursday (July 30) to investigate Zoom Video Communications Inc., the video technology company, and TikTok, the Chinese video-sharing social networking service, Reuters reported.

In a letter to Assistant Attorney General John Demers, Senators Richard Blumenthal (D-Connecticut) and Josh Hawley (R-Missouri) said as sheltering-in-place continues amid COVID-19, many Amercians are substituting Zoom calls for personal interaction and binging on TikTok videos.

“We believe that it is imperative that the Department of Justice investigate and determine whether Zoom and TikTok’s business relationships, data handling practices, and operational connections to China pose a risk to Americans,” they wrote. “Based on numerous reports, we are extremely concerned that Zoom and TikTok have disclosed private information about Americans to the People’s Republic of China and engaged in censorship on behalf of the Chinese government.”

The DOJ did not respond to requests for comment.

Zoom told the news service in a statement that it takes user privacy, security, and trust extremely seriously, and “as always, we welcome conversations with officials about our global business practices and policies.”

Beijing-based ByteDance, the parent company of TikTok, said its data is stored in the U.S. and backed up in Singapore.

“Our content and moderation policies are led by our U.S.-based team in California and aren’t influenced by any foreign government,” the company told Reuters. “We’ve never shared TikTok user data with the Chinese government, and would not do so if asked.”

While Zoom is headquartered in San Jose, Calif., it houses research and development centers in China with more than 700 employees, according to a filing with the Securities and Exchange Commission, Reuters reported.

Shares of Zoom stock slipped by 1 percent to $249.93 per share at the close on Thursday (July 30) from $252.39 on Wednesday (July 29).

Last month, Zoom reported its total revenue for the first quarter that ended on April 30 was $328.2 million, up 169 percent year-over-year, as families and businesses used the virtual meeting service. GAAP income from operations for the quarter was $23.4 million, compared to $1.6 million in the first quarter of fiscal year 2020.

“We were humbled by the accelerated adoption of the Zoom platform around the globe in Q1,” said Eric S. Yuan, founder and CEO of Zoom. “The COVID-19 crisis has driven higher demand for distributed, face-to-face interactions and collaboration using Zoom.”

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