ByteDance Must Sell Chinese TikTok Stake or Face U.S. Ban

The Biden administration has reportedly come to the conclusion that ByteDance must sell its stake in TikTok or face the possibility of a U.S. ban. The decision comes as Congress turns up the heat on action against TikTok, which is suspected of compromising U.S. data and potentially manipulating news feeds to influence opinion. It follows a quiet, years-long assessment by the Committee on Foreign Investment in the U.S. (CFIUS), which The Wall Street Journal says “made the sale demand recently.” The Treasury Department, which oversees CFIUS, declined to comment.

ByteDance’s ongoing negotiations with the CFIUS panel regarding a plan to secure the data of U.S. TikTok users “have been at a stalemate for months,” according to The Wall Street Journal, which says the Pentagon and Justice Department representatives are among the committee members supporting a forced sale.

TikTok “confirmed to CNN that CFIUS had contacted the company, adding that it did not dispute The Journal’s report. But TikTok declined to discuss specifics of the government’s request, including details around its timing,” CNN says.

The administration’s new hard line is more in keeping with the signals coming from both parties and even members of Biden’s own administration, who have been sounding an alarm over a perceived national security risk presented by the viral video app’s Chinese leadership.

TikTok spokeswoman Brooke Oberwetter responded in a statement that says “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,” an apparent reference to the $1.5 billion proposal known as Project Texas.

The reported CFIUS parry comes as the Senate tees-up the RESTRICT Act, which could strengthen Biden’s hand in dealing with TikTok and other foreign-owned technologies. CNN reports that “some U.S. lawmakers have moved to expand Biden’s authority to impose a nationwide TikTok ban” — independent from the bill passed in December prohibiting TikTok on U.S. government devices, and separate from the CFIUS process — “a proposal the White House quickly welcomed.”

The European Union and Canada have also instituted TikTok bans on government devices, and CNN reports the UK this week added its own ban, evidencing “suspicion among western governments to TikTok.”

TikTok CEO Shou Zi Chew is scheduled to appear before the House Energy and Commerce Committee on Thursday, March 23.

TikTok CEO’s Message to Washington: A Sale Won’t Solve Security Concerns, The Wall Street Journal, 3/16/23
Finding a Buyer for TikTok May Not Be So Easy, The New York Times, 3/16/23
UK Bans TikTok on Government Devices, The New York Times, 3/16/23

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