The Biden administration is demanding that the Chinese owners of TikTok sell their shares in the social network. Otherwise, they could face banning it in the US, reports the WSJ, citing its own sources.
TikTok executives said that 60% of ByteDance (the company that owns TikTok) is owned by international investors, 20% by employees and 20% by voting founders.
On Wednesday, TikTok said the forced sale would not solve the security threat. The company has promised to spend $1.5 billion on a program to protect the data and content of American users from access by the Chinese government.
“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,” TikTok spokeswoman Brooke Oberwetter said in a statement. “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, which we are already implementing.”
Negotiations with Cfius (the Committee on Foreign Investment in the United States) on how to protect TikTok’s data have been going on for over two years and have been at an impasse for several months. Representatives of the Pentagon and the US Department of Justice, who are part of the expert group, support the forced sale of TikTok.
U.S. Deputy Attorney General Lisa Monaco and other top officials have repeatedly cited China’s national security law, which requires Chinese companies to hand over customer data upon request.
“Our intelligence community has been very clear about China’s efforts and intention to mold the use of this technology using data in a worldview that is completely inconsistent with our own,” Ms. Monaco said.
TikTok says its $1.5 billion security plan includes giving US company Oracle access to the social network’s algorithmic code and the ability to flag problems for government inspectors.
Critics say the plan is insufficient, as any Chinese company must comply with Beijing’s demands if asked to.
In 2020, the Trump administration tried to force a sale of TikTok to a majority US shareholder, but that effort was unsuccessful, with TikTok and ByteDance going to court to block the proposed federal ban.
The Biden administration’s actions against TikTok could lead the company to argue that any forced sale would amount to a ban, and the Chinese government would not allow TikTok’s algorithm to be sold along with the app itself. This means that the ban on the social network in the USA is becoming more and more real.