Chinese App Ban Hits TikTok Parent Firm ByteDance’s $1 Billion India Expansion Plan

The Chinese Foreign Ministry said it was "very concerned" about India's decision, adding that India had a "responsibility to defend the legitimate legal rights of investors, including Chinese companies."

Banning dozens of Chinese apps after a border clash with China possibly derailed a $ 1 billion India expansion plan from China’s ByteDance, while sparking an uproar from users of its popular TikTok video app. TikTok was removed from the Google and Apple app stores in the country after the Center said on Monday night that it was one of 59 applications that it believed posed a “threat to sovereignty and integrity.” The government order did not name China or mention the border clashes.

Application analysis company Sensor Tower said the 59 applications named were of Chinese origin, including Tencent’s WeChat and Alibaba’s UC browser. “If this is not reversed, these companies would be forced to curtail their operations in India, which could result in a loss of employment,” said a lawyer advising a Chinese company whose application has been banned.

The Chinese Foreign Ministry said it was “very concerned” about India’s decision, adding that India had a “responsibility to defend the legitimate legal rights of investors, including Chinese companies.”

The biggest victim of the move appears to be ByteDance, who since last year hired several top executives and set plans to invest $ 1 billion in India. India is TikTok’s fastest growing market, accounting for 30% of its 2 billion downloads worldwide. TikTok said in a statement that the Indian government had invited the company to respond to the ban and present clarifications, adding that it meets all data security and privacy requirements. He did not comment on the fate of his expansion plan.

Following the ban order, many TikTok users posted videos expressing dissatisfaction with the ban. A user @ omkarsharma988 posted a video where he throws the utensils to the floor, hits a chair and cries, with a Hindi song that says “You left me, how will I live now?” The video received 218,000 likes, as the app still works on phones it’s already downloaded on.

When TikTok was briefly banned last year after a court said the app encouraged pornography, the company told the Supreme Court that the ban cost it approximately $ 15 million a month. Several Indian lawyers said that the chances of success through a legal challenge this time were slim given that the government had invoked national security concerns, meaning that Chinese companies can only hope to push to reverse the decision.

“From a legal perspective, (the ban) is sound because reasons like national security are difficult to question,” said Santosh Pai of Link Legal, which advises Chinese companies.

The ban also left Tencent disappointed, which has applications in the market and is also a major investor in Indian startups, two sources aware of the company’s concerns told Reuters. In April, the central government ordered a review of incoming investments from countries like China, hitting people like Tencent.

While its WeChat messaging app isn’t as popular in India, the company fears the government may impose a ban later on the mobile version of its highly successful game PlayerUnknown’s Battlegrounds, one of the sources said. Tencent declined to comment. Two games from China-based companies, “Mobile Legends” and “Clash of Kings,” were among those banned on Monday.

Sensor Tower said the 59 banned apps have recorded approximately 4.9 billion downloads in India since January 2014.

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