TOPLINE
TikTok has launched a more than $2 billion fund to distribute money to creators globally over the next three years in an apparent response to reports that Facebook has been making lucrative offers to TikTok influencers to lure them over to Instagram’s short-term video functionality Reels in advance of its early August launch.
Reels is widely viewed as Facebook's attempt to compete with TikTok.
KEY FACTS
Reels is widely viewed as Facebook's attempt to compete with TikTok, owned by China-based parent company ByteDance, which crossed the 2 billion downloads mark in April, according to Sensor Tower data.
Facebook has reportedly asked TikTok creators to post exclusively on Reels or to post their content on Reels first, offering to pay for video production with the caveat that that creators sign nondisclosure agreements to keep details of the deal on the down-low.
Facebook has offered hundreds of thousands of dollars to creators with the most followers, paying more money to those who agree to post their videos exclusively on Reels, people familiar with the deals said.
A Facebook spokesperson told Forbes “we have a long history of reaching out to emerging creators and working to break new stars on Instagram.”
This isn’t the first time the companies have gone head to head: TikTok previously ran ads on Facebook and Instagram.
TikTok faces mounting security and privacy concerns and has repeatedly denied claims it shares its users’ data with the Chinese government and has told CNBC that protecting the privacy of its users’ data is a “critical priority.”
key background
White House trade advisor Peter Navarro told Fox News last week that President Donald Trump will take “strong action” against TikTok and other Chinese apps, claiming that all data collected from Americans by TikTok, “goes right to servers in China, right to the Chinese military, the Chinese Communist Party, and the agencies that want to steal our intellectual property.” Noting India’s recent ban on TikTok, WeChat and other popular Chinese apps, Navarro hinted that similar action could be taken without explicitly mentioning a ban. Secretary of State Mike Pompeo told Fox News in early July that the U.S. is “certainly looking at” restricting TikTok and other Chinese social media apps. Pompeo’s remarks follow months of concern from Republican and Democratic senators who consider TikTok to be a threat to U.S. national security. TikTok seems to be distancing itself from China — in May the company hired an American CEO and in July, it pledged to hire 10,000 U.S. employees during the next three years. Its parent company ByteDance is reportedly considering moving its headquarters out of China or hiring a new management board.
big number
45.4 million. That’s how many TikTok users there are in the U.S., according to Statista. The statistics firm estimates that the number could grow to 60.3 million by 2024.
news peg
The U.S. Federal Trade Commission (FTC) and the Justice Department launched an antitrust investigation last June against Facebook, Amazon, Apple and Google. The House Judiciary Committee hearing with Mark Zuckerberg, Jeff Bezos, Tim Cook, and Sundar Pichai was postponed from Monday to Wednesday to allow members of congress to honor the late Rep. John Lewis.
further reading
Facebook Offers Money to Reel In TikTok Creators (Wall Street Journal)
As TikTok Takes Over America, It’s Making A Disney Executive Its New CEO (Forbes)
White House Adviser Hints At TikTok Ban As DNC, RNC Warn Campaigns On Security Risks With App (Forbes)
Trump Administration ‘Certainly Looking At’ Banning TikTok In The U.S., Pompeo Says (Forbes)
F.T.C.’s Facebook Investigation May Stretch Past Election (New York Times)
