India is too big for TikTok to risk another ban
New Delhi(CNN Business) One of China's biggest social media companies is scrambling to protect its business in India after a second run-in with authorities in three months.
ByteDance, the owner of hugely popular video sharing app TikTok, will set up a data center in India and take other steps to ensure the safety of its users in the country. India is one of TikTok's biggest markets, with over 200 million users.
"Since the launch of our platforms in India, we have stored the data of our Indian users at industry-leading third-party data centers in the US and Singapore," ByteDance said in a statement on Sunday. "We now believe that the time has come to take the next big leap."
Prime Minister Narendra Modi has been pushing global tech giants to store data on Indian users within India, citing a need to protect citizens and give Indian law enforcement authorities easier access to the information.
Companies like Google (GOOGL) and Facebook (FB), as well as the US government, have criticized the proposed regulations, saying they will make it tougher for foreign companies to do business and hurt India's digital economy and innovation.
But ByteDance, which is investing $1 billion in India over the next three years, is ready to comply.
"We are now in the process of examining options for safe, secure and reliable services for our Indian users within India's borders," it said.
TikTok and another of the company's apps, Helo, have come under fire in recent months for potentially exposing young children to pornography and other inappropriate content. A court in India banned TikTok in April citing those concerns, but reinstated it a week later after the company successfully appealed the decision. Helo, a social network for posting photos, videos and messages, currently has 50 million monthly active users in India and supports 14 Indian languages.
India's technology ministry threatened TikTok and Helo with another ban last week, giving them until Monday to respond to 24 questions about "anti-national" and "anti-social" content, as well as data privacy and the protection of children, according to local media reports. The ministry did not immediately respond to a request for comment.
TikTok and Helo confirmed they had received the questions and said they would respond by Monday.
"Our continued success in India will not be possible without the support of our local community," they said in a statement to CNN Business last week. "We take our responsibilities to this community seriously and welcome this opportunity to fully collaborate with the government to meet and exceed our obligations."
ByteDance, whose reported valuation of $75 billion makes it the world's most valuable startup, crossed a billion monthly active users across its platforms last month.
India is not the only country where TikTok has run into trouble with regulators. It was hit with a fine of $5.7 million by the US Federal Trade Commission in February for collecting data on children under the age of 13. The fine related to Musical.ly, a video-sharing app ByteDance bought in 2017 and merged with TikTok last August.
