TikTok doubts its ban on government devices will hurt business as the Chinese-owned social media app easily more than doubled revenue and profit in Australia last year, despite facing intense scrutiny across the Western world.
Financial statements filed with the corporate regulator reveal TikTok Australia revenue surged to $173.9 million in calendar 2022 – up from $66 million the year before. Profit was just under $5.4 million, up from $1.7 million.
That number is likely to continue to grow. Over the past few weeks, the company has also quietly given three gambling companies a green light to advertise, overriding an outright ban on betting ads to include Entain-owned Neds and Ladbrokes and Tabcorp-linked Dabble.
TikTok’s revenue in Australia nearly tripled from 2021 to 2022.
Sportsbet has been piloting its own gambling advertising on the platform since November. This is despite an ongoing government inquiry that is set to crack down on the $300 million spent annually on gambling advertising.
In April, the Australian government banned TikTok from official devices, saying it “poses significant security and privacy risks” due to the amount of data it harvests and “exposure to extrajudicial directions from a foreign government that conflict with Australian law”.
TikTok’s filings reveal the company is unconcerned by the commercial impact of such a move.
“The company stresses that there is no evidence to suggest that TikTok is in any way a security risk to Australians,” TikTok Australia says.
“The directors would not anticipate a significant impact on our business as a result of the recent ban of the app on government issues devices. The ban does not extend further than government-issued devices and will not impact the millions of Australians on TikTok.”
While TikTok Australia revenue from advertising jumped 176 per cent, it paid $71.4 million to a fellow subsidiary to buy online advertising space.
TikTok Australia’s accounts were audited by PwC Australia, which banned its staff from using the app on work phones for those who shared Australian federal or state government clients.
The beleaguered big-four accounting firm used information it obtained from confidential Australian government briefings to target US tech giants, such as Apple, Google and Microsoft, to help sidestep a multinational anti-avoidance law that was aimed at reeling in global tech firms.
TikTok has been expanding aggressively in Australia, while its US-headquartered rivals, such as Meta, which owns Facebook and Instagram, and Twitter, clear the local decks.
TikTok Australia is owned by TikTok Ltd, which is registered in the Cayman Islands. TikTok Ltd is owned by ByteDance, a Chinese multinational based in Beijing and domiciled in the Caymans.
As Meta and Twitter laid off many of their workers in Australia, TikTok attempted to lure them across. According to its employment website, it is advertising for 49 roles in Sydney.
In 2022, employee benefits, which include wages, salaries and leave, jumped to $51.5 million in Australia from just under $21 million. Key management compensation surged to nearly $2.1 million in 2022 from $494,800 in 2021.
Last month the Financial Review revealed the government is considering forcing social media platforms, such as TikTok, to keep their user data onshore in an attempt to allay fears of political interference from China.
The Department of Home Affairs has been exploring onshore data storage requirements, known as data localisation or data residency, as part of a National Data Security Action Plan.
Separately, Home Affairs is looking at options to deal with national security concerns around TikTok and the similarly Chinese-owned WeChat, which stem from their data collection practices and China’s intelligence laws. The laws compel companies and citizens to co-operate with the government.
The agency has also been investigating social media data collected from the likes of Meta’s Facebook and Instagram, as well as Twitter, whose platforms and data have been abused by foreign regimes.
Follow the topics, people and companies that matter to you.
Fetching latest articles
The Daily Habit of Successful People