US Threatens Ban If TikTok Chinese Owners Don’t Sell Stakes

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

The move is the most dramatic in a series of recent route by U.S. officers and lawmakers who have raised fears that TikTok’sU.S. user data could be passed on to China’s government. ByteDance-owned TikTok has further than 100 million U.S. users.

It’s also the first time under the administration of Democratic President Joe Biden that a implicit ban on TikTok has been overhung. Biden’s antecedent, Republican Donald Trump, had tried to ban TikTok in 2020 but was blocked by U.S. courts.

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TikTok spokesman Brooke Oberwetter told Reuters that the company had freshly heard from the U.S. Treasury-led Committee on Foreign Investment in the United States (CFIUS), which demanded that the Chinese owners of the app sell their shares, and said otherwise they would face a possibleU.S. ban of the video app.

The Wall Street Journal first reported the move. ByteDance verified that 60 of its shares are owned by global investors, 20 by workers and 20 by its founders.

CFIUS, a important public security body, had unanimously recommended in 2020 that ByteDance divest TikTok. Under pressure from then- President Trump, ByteDance in late 2020 unsuccessfully sought to finalize a deal with Walmart and Oracle Corp to shift TikTok’sU.S. assets into a new reality.

Howbeit, divestment does not answer the problem a change in ownership would not put any new restrictions on data flows or access,” Tiktok’s Oberwetter said in a statement,” If protecting national security is the plan.

TikTok Chief Executive Shou Zi Chew is due to appear before theU.S. Congress coming week. It isn’t clear if the Chinese government would authorize any divestiture and the Chinese Embassy in Washington didn’t instantly respond to a request for comment.

Last month, the White House gave government agencies 30 days to ensure they don’t have TikTok on federal devices and systems. Over 30 U.S. states have also banned workers from using TikTok on government-owned devices.

Any U.S. ban would face significant legal hurdles and implicit political ramifications, since TikTok is popular with millions of young Americans.

Last week, Popular Senator Mark Warner said it was important the U.S. government do further to make clear what it believes are the national security threats from TikTok.” It’s going to be peremptory on the government to show its cards in terms of how this is a trouble,” Warner said.

TikTok and CFIUS have been negotiating for further than two years on data security conditions. TikTok said it has spent further than$1.5 billion on strict data security efforts and rejects viewing allegations.

TikTok said on Wednesday that” the best way to address concerns about national security is with the transparent,U.S.- based protection of U.S. user data and systems, with robust third- party monitoring, vetting, and verification.”

Last week, the White House backed legislation by a dozen senators to give the administration new powers to ban TikTok and other foreign-based technologies if they pose national security threats. It could give the Biden administration new security in court if they sought to ban TikTok.

White House national security counsel Jake Sullivan praised the bipartisan bill, saying it” would strengthen our capability to address separate threats posed by individual deals, and systemic threats posed by certain classes of deals involving countries of concern in sensitive technology sectors.”

The House of Representatives Foreign Affairs Committee this month voted along party lines on a much broader bill aimed at Tiktok, sponsored by Republican Representative Michael McCaul, that Democrats said would challenge the administration to effectively ban TikTok and other subsidiaries of ByteDance.

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