US demands the Chinese owner of TikTok sells its stake in app or it will be BANNED – as company pledges to spend $1.5 billion to safeguard user data
- A US interagency task force has demanded that TikTok’s ownership change
- Chinese laws mean Chinese companies must share data with its government
- A similar change was proposed by the Trump administration but blocked in court
The Biden administration has threatened to ban TikTok in the US unless its Chinese owner sells its shares in the app.
It is the first time the administration has explicitly threatened a ban and represents a shift in its attitude towards the platform, which Republicans have said is a national security threat for the way it harvests data from US citizens.
The demand was made by the Committee on Foreign Investments in the United States and specifies that TikTok’s parent company, ByteDance, sell its stake in the US version of the app.
It is unclear whether federal officials have given ByteDance a deadline to sell.
Hilary McQuaide, a spokesperson for TikTok, confirmed to DaiyMail.com that the demand was made but suggested the changes would not increase the security of US citizens’ data.
The Biden administration has threatened to ban TikTok in the US unless its Chinese owner, ByteDance, sells its shares in the app. Pictured is Shou Zi Chew, CEO of TikTok
The demand was made by the Committee on Foreign Investments in the US, which is chaired by Janet Yellen, the Secretary of the Treasury
‘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,’ she 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,’ she added.
Critics of TikTok have said Chinese laws require Chinese-owned companies to share data with the Chinese government.
TikTok is instead proposing a $1.5 billion security plan, dubbed Project Texas, that would see US users’ data walled off and supervised by Texas-based Oracle.
The plan would include independent monitors and auditors to ensure that neither ByteDance, nor Chinese officials, would be able to access certain data.
The Committee on Foreign Investments in the United States (CFIUS) is an interagency committee that oversees national security risks posed by foreign investments. It is chaired by Janet Yellen, the Secretary of the Treasury, but its members include the heads of the justice, defense, state and energy departments.
Critics of TikTok have said Chinese laws require Chinese-owned companies to share data with the Chinese government
ByteDance staff walk past the ByteDance headquarters building in Beijing in 2020. Its executives say 60 percent of its shares are owned by foreign investors
In 2020 President Trump (pictured in 2020) gave the Chinese company ByteDance 90 days to divest itself of any assets used to support the popular TikTok app in the United States. His administration’s efforts were blocked in court
TikTok executives have said that 60 percent of ByteDance shares are owned by global investors, 20 percent by employees and 20 percent by its founders, according to the Wall Street Journal, which first reported on the demand.
TikTok’s CEO, Shou Zi Chew, is due to testify before the House Energy and Commerce Committee next Thursday.
This request comes after a dozen US senators unveiled a bipartisan bill last week providing President Biden with the authority to ban TikTok nationwide.
The Restrict Act would allow the US Commerce Department to declare companies with foreign links national security risks.
Last December, the Senate passed a bill to ban TikTok on government devices.
In 2020 the Trump administration threatened to ban TikTok unless the app was sold to a US company. Those efforts were thwarted when ByteDance went to court to oppose the ban.
It argued that it would be in violation of the Berman amendments, which allow for the free flow of ‘informational material’ from hostile countries.
