TikTok may soon be banned in the US if Chinese owners refuse to sell their stakes, according to reports. This is the latest step by Washington over concerns that data from the app could be used to spy on American users.
The Biden administration, along with other governmental bodies, have recently demanded that TikTok owner ByteDance divest its stake in the video app.
National Security Concerns
TikTok is facing a possible ban in the United States if its Chinese owners refuse to sell their stake, according to a report from The Wall Street Journal. This is the latest in a series of threats from the US government over concerns that the app’s user data could be shared with the Chinese government.
The Biden administration, which has been accused of not taking a tough enough stance on China, is now hardening its stance on the social media app, according to a source familiar with the matter. The committee on foreign investment in the United States, or CFIUS, has contacted ByteDance, the company behind TikTok, about national security concerns, the source said.
A divestiture, which could result in a sale or initial public offering, is considered a last resort. This is because it would be a transaction that would have to be approved by the Chinese government, a source said.
Data Privacy Concerns
The United States has warned Chinese owners of TikTok that they must sell their stakes or risk the app being banned in the U.S., according to people familiar with the matter. The Treasury Department is leading the discussion through the Committee on Foreign Investment in the United States, or CFIUS.
Some US lawmakers and officials worry that data from the wildly popular video-sharing app could be weaponized against Americans. They worry that the company’s parent, Chinese tech firm ByteDance, can share user data with Beijing to help spy on users or create misinformation campaigns.
In response, TikTok has launched a security initiative that relies on Oracle and a third-party auditing firm to verify its algorithms and source code. The company also rejects spying allegations.
Shareholders’ Rights
TikTok could face a possible ban from the United States if its Chinese owners refuse to sell their stake in the app, according to a Wall Street Journal report. The Biden administration is demanding that ByteDance, TikTok’s Chinese owner, divest their shares or else it will impose a ban, sources told the newspaper.
The WSJ reported that the Treasury-led Committee on Foreign Investment in the United States, or CFIUS, made the demand recently. It also said that CFIUS, which has been negotiating with TikTok on data security requirements for more than two years, had recommended the sale of ByteDance last year.
TikTok has been under scrutiny since its parent company, Beijing-based ByteDance, has reportedly been gathering and sharing user data with Chinese intelligence agencies. The app’s CEO, Shou Zi Chew, is scheduled to testify before Congress next week and is expected to dispute any legal claims.
Legal Issues
TikTok is a popular app that’s been getting more attention from the US government over concerns about data privacy. This is due to the fact that it collects a lot of user information, like their phone number and email address.
It also shares this data with law enforcement in certain situations, such as when they believe that you are involved in criminal activity or when a law enforcement request is legitimate and proportionate.
This raises many legal issues, which are why the Biden administration is reportedly threatening to ban TikTok in the United States if its Chinese owners refuse to sell their stake.
The Treasury Department is leading the discussion through the Committee on Foreign Investment in the United States (Cfius), which has power to halt foreign investments if there are national security concerns. The Cfius is currently in discussions with ByteDance, the TikTok owner, to address these concerns, according to people familiar with the situation.