TikTok can’t catch a break.

From threats of new competition to now being under investigation and accused of violating the law. Earlier this month Senator Marco Rubio asked the US Government to launch an investigation into Bytedance owned video-sharing platform TikTok over censorship concerns. In 2017, the music karaoke app Musical.ly was bought by Bytedance for more than $800 million. Bytedance dumped Musical.ly for TikTok, which now has more than 1 billion active users monthly. 

In a letter addressed to Treasury Secretary Steven Mnuchin, Rubio asked the Committee on Foreign Investment in the United States (CFIUS) to launch an investigation into the acquisition. 

What Is The Problem?

Rubio wrote: “The Chinese government’s nefarious efforts to censor information inside free societies around the world cannot be accepted and pose serious long-term challenges to the U.S. and our allies.”

In response to Senator Rubio’s letter, National Music Publishers’ Association President & CEO David Israelite said that the association is ‘pleased’ to see that a review of TikTok has been requested over censorship concerns and expressed its own concerns over copyright infringement on the platform. “While some publishers have been able to negotiate with TikTok to license their catalogs, a large part of [the publishing] industry does not have agreements in place, meaning numerous works continue to be used unlawfully as the platform’s popularity grows exponentially,” Israelite said. “Many videos uploaded to TikTok incorporate musical works that have not been licensed and for which copyright owners are not being paid.” Israelite is hoping that if Congress looks further into matters relating to TikTok that copyright theft is included in the scope of its examination. 

What Does TikTok Have to Say?

A TikTok spokesperson has provided the following statement:

“TikTok has broad licensing coverage across the music publishing industry covering many thousands of publishers and songwriters and millions of copyrights and has paid royalties since its inception. The platform has spurred the success of artists and songwriters worldwide through its viral meme culture, driving chart hits and building household names. We are proud to engage with and support the music community.”

The Dysfunctional-But-Functional Relationship Between TikTok and Record Labels

The video-sharing platform has grown in popularity in the US and Europe since consolidating TikTok and Musical.ly by new owner ByteDance.

The platform has jump started household names like Lil Nas X, 24kGoldn, and others prompting major labels to quickly sign artists with songs that perform well on TikTok, betting that their popularity will transfer to other platforms, but there are still roadblocks. Earlier this year, the three biggest record labels demanded TikTok pay more money in royalties for songs played on the platform set up a showdown between both parties.

Reports suggest that existing licensing agreements with Sony BMG, Universal Music Group, and Warner Music Group had expired, sending negotiations back to the drawing board. TikTok owner Bytedance has been hesitant to pay music labels higher royalties for access to copyrighted music, with the company’s head of global music business development stating the platform does not require a label’s entire collection.

If both sides found common ground and allow users to make a hit via a 15-second clip, that could change how music is written, remixed, created, and transform what is heard on the radio.

No deal has been made and with more pressure being put on Bytedance from the US Government and other music organizations could spell the end of the first major Chinese-owned social app to make a dent in the West.