In its annual financial report filed with corporate regulator ASIC this week,TikTok Australia reported profit for the 2023 calendar year of $11.4 million – nearly double its $5.4 million profit a year earlier – on revenue of $375 million,which was more than twice as much as the previous year.
TikTok is under fire from US legislators amid claims it represents a national security risk.Alamy
The social media company makes the vast bulk of its revenue from third-party advertising in its mobile app,and despite the increase in scrutiny across the Western world,has raked in advertising dollars at a record clip.
TikTok counts around 8.5 million Australian users,approximately a third of the population.
Its local headquarters is on Sydney’s Pitt Street,while its parent company and ultimate holding company,TikTok Ltd and ByteDance,are both located in the Cayman Islands,a tax haven. TikTok Australia paid $5.1 million in income tax in 2023,compared with $1.8 million a year earlier. Its accounts were audited by PwC Australia.
The profit surge comes as the following a move by the US to ban the app over security concerns.
US President Joe Biden last month signed a law requiring TikTok parent company ByteDance to divest from the app by January 2025 or face an effective ban in the US.
ByteDance has said that it has no plans to pursue a sale,and that it will instead be challenging the US legislation on.
The financial documents make no mention of a potential ban in Australia. Prime Minister Anthony Albanese has said his government has no plans to move beyond existing rules that forbid ministers and government officials using TikTok on phones containing sensitive information.
Coalition cybersecurity and home affairs spokesman James Paterson,however,has labelled TikTok a “bad-faith actor” and urged the government to join other countries in trying to remove the influence of the Chinese Communist Party on its operations.
Senator James Paterson.Alex Ellinghausen
The company’s Australian general manager of advertising Brett Armstrong said last week there was no reason for the TikTok app to be banned locally.
He pointed to a report from Oxford Economics and paid for by TikTok that claimed TikTok had contributed more than $1 billion in value to Australia’s GDP.
“TikTok is a platform that is loved by over 8.5 million Australians and 350,000 Australian businesses,with a recent independent study by Oxford Economics finding that we contribute $1.1 billion and 13,000 jobs to the Australian economy,” Armstrong said in a statement.
“There is zero evidence suggesting that TikTok is in any way a national security risk,and we welcome the Prime Minister’s recent comments that his government has no plans to ban us.”
Armstrong is now one of TikTok’s most prominent Australian executives after the company opted against replacing Lee Hunter,TikTok’s Australian general manager,who departed earlier this year. Hunter,a former Google and YouTube executive,had served as the local public face of TikTok since May 2020.
The Office of the Australian Information Commissioner (OAIC) is also considering launching a full investigation into TikTok following including email addresses,mobile phone numbers and browsing histories without their knowledge or consent,in a potential breach of the nation’s privacy laws.
“The information-handling practices of social media companies is a matter of regulatory priority for the OAIC,” commissioner Angelene Falk told a Senate estimates hearing in March.
“Upon examination of TikTok’s response,a decision will need to be made as to whether further regulatory action is warranted,and also whether any other action is warranted in relation to other entities that might be utilising this pixel.”
TikTok has denied any wrongdoing,saying in a statement that were “an industry-wide tool used to improve the effectiveness of advertising services”.
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