Washington has urged TikTok’s Chinese owners to divest their stakes in the popular video app or face a potential US-wide ban, representatives of ByteDance – the company behind the platform – told various media outlets on Wednesday.
TikTok spokesperson Brooke Oberwetter told the Wall Street Journal, which first broke the story, that the Beijing-based company had received the ultimatum from the Committee on Foreign Investment in the US (CFIUS). It’s part of the US Treasury Department and is officially tasked with overseeing national security risks in cross-border investments.
ByteDance, which was founded in Beijing in 2012, has pointed out that 60% of its shares are currently owned by global investors, 20% by employees, and 20% by its founders, who also carry outsize voting rights.
Nevertheless, Washington has raised concerns that TikTok’s US user data could eventually be passed on to the Chinese government, citing China’s national security law, which requires companies to turn over customer data on request. TikTok currently boasts over 100 million US-based users.
The company, however, has stressed that a forced sale would do little to alleviate the perceived security risk brought up by the US. “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,” Oberwetter told the WSJ.
She pointed out that TikTok is already implementing a $1.5 billion security plan specifically intended to safeguard US user data and content from Chinese government access or influence, which Oberwetter says is the “best way” to address Washington’s concerns.
While the White House and the Treasury Department have so far refused to comment on the matter, TikTok CEO Shou Zi Chew is expected to appear before US Congress next week.
China, meanwhile, has accused the US of spreading disinformation and trying to suppress TikTok. Foreign Ministry spokesperson Wang Wenbin told reporters on Thursday that Washington has yet to provide any evidence that the video app threatens US national security and suggested that the excuse of data security is being used to suppress foreign companies.
In 2020, then-President Donald Trump also tried banning TikTok, but his efforts were blocked by the US courts. Earlier this month, however, the House Foreign Affairs Committee passed legislation that would grant President Joe Biden the power to ban the app and other Chinese-owned social media platforms that pose alleged security risks. That bill now needs to pass the House of Representatives and the Senate before it can become law.
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