By Fanny Potkin

SINGAPORE, Aug 13 (Reuters) - Chinese tech giant ByteDance censored content it perceived as critical of the Chinese government on its news aggregator app in Indonesia from 2018 to mid-2020, six people with direct knowledge of the matter told Reuters.

The sources said that local moderators were instructed by a team from ByteDance's Beijing headquarters to delete articles seen as "negative" about Chinese authorities on the Baca Berita (BaBe) app.

In a statement to Reuters, BaBe said it disagreed with the claims and that it moderates content according to its community guidelines and in line with Indonesia's local laws.

Those guidelines, which are published on its website, do not mention China or the Chinese government.

Following the publication of this story, https://sheekyforums.com/ BaBe said that before the "more localised approach" it currently uses, Babe had "some moderation practices in place that were not consistent with our philosophy of having the Indonesian team deciding what is appropriate for its market.

"These guidelines were replaced in 2019 and we´ve since built and empowered local moderation teams to make decisions that suit the local market," the statement added.

It did not immediately respond to a follow-up Reuters query asking which month in 2019 those guidelines had changed.

ByteDance in Beijing said it had no additional comment beyond the BaBe statement. China's foreign ministry and its internet regulator, the Cyberspace Administration of China (CAC), did not immediately respond to requests for comment.

U.S President Donald Trump has threatened to shut down ByteDance's short-video app TikTok - widely popular in the U.S., Indonesia and other countries - on national security grounds unless it is sold to a U.S. company.

Some U.S lawmakers, including Republican Senator Josh Hawley, have raised concerns over TikTok's data security practices and allegations that it engages in censorship at the behest of the Chinese government.

"If ByteDance will censor BaBe in Indonesia, what´s to stop it from censoring TikTok in the United States?" Hawley said, when asked to comment on the Reuters story. "We shouldn´t trust any assurances they make.

This is another reason TikTok as it currently exists should be banned in the United States."

A senior Trump administration official also weighed in on the news. "Entities such as ByteDance ultimately answer to the Chinese Communist Party (CCP) and have a history of censoring free speech to conform to CCP propaganda," the person said.

Indonesia, a country of 270 million where over half the population is under 30, is one of ByteDance's fastest-growing markets. TikTok had more than 147 million downloads in the country, according to data from app analytics firm SensorTower.

ByteDance bought Indonesian news aggregator BaBe in 2018 after TikTok was briefly banned in the country for showing "pornography, inappropriate content and blasphemy", according to officials.

In seeking to reverse the ban, ByteDance agreed with Indonesian authorities to hire a team of local TikTok moderators and reinforce its presence in the world's fourth largest country, according to the then Indonesian communications minister and three company sources.

It then purchased the full operations of BaBe, in which it had already been a majority investor.

Soon after, moderation guidelines for BaBe, which uses artificial intelligence to aggregate stories from hundreds of Indonesian media outlets, were crafted by a team from ByteDance's Beijing headquarters, two of the six sources said.

BaBe moderators were also told not publish any articles on the TikTok ban while negotiations with the Indonesian government were underway, the people said.

Under the new BaBe guidelines, articles from partner media outlets that were perceived as critical of the Chinese government would either not be republished on the BaBe app or would be taken down from the app, according to the six sources.

Articles with the keyword "Tiananmen," a reference to China's 1989 Tiananmen Square crackdown, or to Mao Zedong, the founder of modern China, were among those taken down, one person with direct involvement said.

Another direct source described articles about tensions between Indonesia and China over the South China Sea as being banned on the app, even when they came from the country's official news agency, Antara.

Three of the sources said BaBe was using content guidelines patterned on those used for ByteDance's Chinese news app, Toutiao, with some tweaks made for Indonesia regarding the topic of elections as well regarding race, ethnicity, and religion in Indonesia. Sensationalist articles on those topics, which are highly sensitive in Indonesia, would be dropped, they said.

"They wanted a non-political happy tone for the app," one of the people said.

The guidelines changed in mid-2020, when it became possible to read articles on previously censored topics on the BaBe app, a separate source said, calling it a "learning process for ByteDance."

ByteDance disagreed with this assessment and said guidelines changed in 2019.

A 2019 internal ByteDance presentation reviewed by Reuters describes BaBe as Indonesia's top news app with more than 8 million monthly active users and 30 million downloads by the end of 2019. (Additional reporting by Alexandra Alper in Washington, D.C.; Brenda Goh in Shanghai, Yingzhi Yang; editing by Jonathan Weber and Nick Tattersall and Edward Tobin)