TikTok could face US ban if Chinese owners don’t divest, company says

The Biden administration has demanded that TikTok’s Chinese owners divest their stake in the popular video app or face a possible US ban, the company told Reuters on Wednesday.

The move, first reported by the Wall Street Journal, is the most dramatic in a series of recent moves by US officials and lawmakers that have raised concerns that the data of TikTok’s US users could be handed over to the Chinese government. ByteDance-owned TikTok has more than 100 million US users.

This is the first time under US President Joe Biden’s administration that a possible ban on TikTok has been threatened. Biden’s predecessor, Donald Trump, tried to ban TikTok in 2020, but the courts blocked it.

TikTok spokeswoman Brooke Oberwetter told Reuters the company recently heard from the U.S. Treasury-led Committee on Foreign Investment in the United States (CFIUS), which demanded that the app’s Chinese owners sell their shares and said that if they didn’t. , they will face a possible ban on the video app in the US.

The Journal notes that 60 percent of ByteDance’s shares are owned by global investors, 20 percent by employees and 20 percent by its founders.

Prior to the investment proposal

CFIUS, the powerful national security body, in 2020 unanimously recommended that ByteDance divest from TikTok.

“If the goal is to protect national security, then the administration does not solve the problem. The change in ownership will not impose any new restrictions on data flows or access,” Tiktok’s Oberwetter said in a statement.

The White House declined to comment.

TikTok CEO Shaw Zi-Chu is scheduled to appear before the US Congress next week. It is unclear whether the Chinese government would approve any takeovers.

Any US ban would face significant legal hurdles.

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TikTok denies spying allegations

TikTok and CFIUS have been negotiating data security claims for more than two years. The video software company has said it has spent more than $1.5 billion on rigorous data security efforts and denies allegations of espionage.

TikTok said on Wednesday that “the best way to address national security concerns is transparent, US-based protection of US user data and systems with strong third-party monitoring, verification and verification.”

Last week, the White House backed legislation by dozens of senators to give the administration new powers to ban TikTok and other foreign technologies if they pose national security threats.

It could give the Biden administration new ammunition in court if they try to ban the app.

White House national security adviser Jake Sullivan praised the bipartisan bill, saying it would “reinforce discrete risks from individual transactions and systemic risks in certain classes of transactions involving countries of concern in sensitive technology areas.”

The House Foreign Affairs Committee voted this month on a bill sponsored by Republican Representative Michael McCaul that would give Biden the power to ban TikTok.

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