TikTok has reportedly been told by the Biden administration that its Chinese owners must divest their stakes in the app or face a potential ban in the US due to fears that user data could be passed to China’s government. The video-sharing platform, which has over 100 million US users, is owned by ByteDance. TikTok spokesperson Brooke Oberwetter confirmed that the Committee on Foreign Investment in the US (CFIUS) had demanded that the Chinese owners of the app sell their shares or face a possible ban. It is the first time a potential ban on TikTok has been threatened under the Biden administration. Former President Donald Trump had attempted to ban TikTok in 2020, but was prevented from doing so by US courts.
CFIUS unanimously recommended in 2020 that ByteDance divest TikTok. The company unsuccessfully attempted to finalize a deal with Walmart and Oracle in late 2020 to transfer TikTok’s US assets into a new entity under pressure from Trump. TikTok CEO Shou Zi Chew is due to appear before the US Congress next week. It is not clear if the Chinese government would approve any divestiture. The Chinese Embassy in Washington declined to comment.
Last month, the White House gave government agencies 30 days to ensure they do not have TikTok on federal devices and systems, and over 30 US states have also banned employees from using TikTok on government-owned devices. TikTok and CFIUS have been negotiating data security requirements for over two years. TikTok claims it has spent over $1.5 billion on rigorous data security efforts and denies spying allegations.
TikTok suggests that the best way to address concerns about national security is with transparent, US-based protection of US user data and systems with robust third-party monitoring, vetting, and verification. However, TikTok spokesperson Oberwetter said that “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”.
Any potential ban would face significant legal challenges and potential political ramifications due to the app’s popularity with millions of young Americans. Last week, the White House backed legislation to give the administration new powers to ban TikTok and other foreign-based technologies if they pose national security threats. The move could give the Biden administration new legal ammunition if it sought to ban TikTok.