The Biden administration has demanded that TikTok’s Chinese house owners divest their stakes within the widespread video app or face a potential U.S. ban, the corporate informed Reuters on Wednesday.
The transfer, first reported by the Wall Street Journal, is essentially the most dramatic in a collection of latest steps by US officers and legislators who’ve raised fears that TikTok’s US consumer knowledge may very well be handed on to China’s authorities. ByteDance-owned TikTok has greater than 100 million US customers.
It is the primary time underneath the administration of US Democratic President Joe Biden {that a} potential ban on TikTok has been threatened. Biden’s predecessor, Republican Donald Trump, had tried to ban TikTok in 2020 however was blocked by the courts.
TikTok spokesperson Brooke Oberwetter informed Reuters that the corporate had not too long ago heard from the US Treasury-led Committee on Foreign Investment within the United States (CFIUS), which demanded that the Chinese house owners of the app promote their shares, and stated in any other case they might face a potential US ban of the video app.
The Journal stated 60 % of ByteDance shares are owned by world buyers, 20 % by staff and 20 % by its founders.
CFIUS, a strong nationwide safety physique in 2020 had unanimously advisable that ByteDance divest TikTok.
“If protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access,” Tiktok’s Oberwetter stated in a press release.
The White House declined to remark.
TikTok Chief Executive Shou Zi Chew is because of seem earlier than the US Congress subsequent week. It’s not clear if the Chinese authorities would approve any divestiture.
Any US ban would face important authorized hurdles.
TikTok and CFIUS have been negotiating for greater than two years on knowledge safety necessities. TikTok stated it has spent greater than $1.5 billion (roughly Rs. 12,400 crore) on rigorous knowledge safety efforts and rejects spying allegations.
TikTok stated on Wednesday that “the best way to address concerns about national security is with the transparent, US-based protection of US user data and systems, with robust third-party monitoring, vetting, and verification.”
Last week, the White House backed laws by a dozen senators to provide the administration new powers to ban TikTok and different foreign-based applied sciences in the event that they pose nationwide safety threats. It may give the Biden administration new ammunition in court docket in the event that they sought to ban TikTok.
White House nationwide safety adviser Jake Sullivan praised the bipartisan invoice, saying it “would strengthen our ability to address discrete risks posed by individual transactions, and systemic risks posed by certain classes of transactions involving countries of concern in sensitive technology sectors.”
The House of Representatives Foreign Affairs Committee this month voted alongside social gathering traces on a invoice sponsored by Republican Representative Michael McCaul to provide Biden the ability to ban TikTok.
© Thomson Reuters 2023
