The Biden Administration Threatens to Ban TikTok in the U.S. Unless ByteDance Divests Its Interest
The Biden administration is echoing the stance of the previous administration when it comes to short-form vertical video app TikTok. The Wall Street Journal reports that the Committee on Foreign Investment in the U.S. (CFIUS) recently demanded that TikTok’s owner divest its interest in the app to avoid a potential ban in the U.S. The CFIUS investigates potential risks for the U.S. in transactions involving American firms and foreign companies. TikTok argues that forcing ByteDance to sell its stake in TikTok would not address the security risks the Biden administration is concerned about. ByteDance currently owns 60% of TikTok’s shares, while global investors own the remaining 40%.
TikTok Parent Company Proposes Spending $1.5 Billion to Keep User Data Out of the Hands of the Chinese Government
To appease administration officials, ByteDance has proposed spending $1.5 billion to prevent personal data and content from U.S. TikTok users from being accessed by the Chinese government. The plan involves walling off ByteDance’s U.S. operations from the rest of the company and holding all data in the U.S. Oracle would have access to inspect ByteDance’s algorithms on behalf of U.S. inspectors.
Former President Donald Trump Attempted to Have U.S. Companies Buy TikTok’s U.S. Operations
In 2020, then-President Trump attempted to force American-owned firms to purchase TikTok’s U.S. operations, threatening a ban otherwise. Trump claimed to have reached a deal to sell these operations to Walmart and Oracle, but the transaction never happened. TikTok went to court to block a federal ban, and Trump ultimately dropped the matter. Concerns around TikTok involve allegations of the app keeping user data and using its iOS app keyboard to record keystrokes. In China, Chinese companies must turn over customer data if requested, leading some to suggest that ByteDance could be forced to provide the Chinese government with data collected from U.S. TikTok users.
Bipartisan Legislation May Allow the U.S. Commerce Department to Ban Troubling Foreign Technology
Senators Mark Warner (D, Va.) and John Thune (R, S.D.) proposed bipartisan legislation that could allow the Commerce Department to ban problematic technology from foreign countries. The National Security Adviser, Jake Sullivan, said that the legislation would enable the U.S. government to prevent certain foreign governments from exploiting technology services operating in the U.S. The legislation aims to address the security concerns surrounding apps such as TikTok. TikTok CEO Shou Zi Chew is scheduled to appear before the House Energy and Commerce Committee to respond to lawmakers’ questions regarding the app’s security issues. Deputy Attorney General Lisa Monaco has stated that China’s intentions regarding the use of technology and data are not consistent with those of the U.S.
