The Biden administration has demanded that TikTok’s Chinese owners divest their stakes in the popular video app or face a possible ban in the United States, the company said on Wednesday.
Key points:
- The Biden administration has told TikTok its Chinese owners must sell their shares or the app could be banned in the United States
- The Chinese foreign ministry says the US is using data security as an excuse to suppress a successful foreign company
- Any wide-ranging ban on TikTok would be politically risky, with the app boasting more than 100 million US users
The move is the most dramatic in a series of recent steps by US officials and legislators who have raised fears that TikTok’s US user data could be passed on to China’s government.
TikTok, which is owned by Chinese company ByteDance, has more than 100 million US users.
It is also the first time under the administration of Democratic President Joe Biden that a potential ban on TikTok has been threatened. Mr Biden’s predecessor, Republican Donald Trump, tried to ban TikTok in 2020 but was blocked by US courts.
TikTok spokesperson Brooke Oberwetter said the company had recently heard from the US Treasury-led Committee on Foreign Investment in the United States (CFIUS), which demanded that the Chinese owners of the app sell their shares, and said otherwise they would face a possible US ban of the video app.
“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,” Ms Oberwetter said in a statement.
ByteDance confirmed that 60 per cent of its shares are owned by global investors, 20 per cent by employees and 20 per cent by its founders.
The White House declined to comment on the company’s statement.
China says ‘stop suppressing’ TikTok
China’s foreign ministry responded on Thursday, saying that the United States had yet to provide evidence that TikTok threatened national security.
“The US should stop spreading disinformation about data security, stop suppressing the relevant company, and provide an open, fair and non-discriminatory environment for foreign businesses to invest and operate in the US,” ministry spokesperson Wang Wenbin told a daily briefing.
It is not clear if the Chinese government would approve any divestiture, and the Chinese embassy in Washington did not immediately respond to a request for comment.
TikTok chief executive Shou Zi Chew is due to appear before the US Congress next week.
UK to ban TikTok on government phones
The United Kingdom is set to announce a ban on TikTok on government phones, PA Media reported on Thursday.
It would follow similar action taken in the United States, where the White House last month gave US government agencies 30 days to ensure they do not have TikTok on federal devices and systems.
The Canadian, Belgian and European governments have already banned the app, while Australian government departments have made their own independent decisions as to whether to allow it on government devices, after the home affairs minister decided against a blanket ban.
When asked about a potential ban on TikTok earlier in the week, UK security minister Tom Tugendhat said understanding the challenges posed by these apps was “incredibly important”.
Wide-ranging US ban would be risky
Any US ban would face significant legal hurdles and potential political ramifications, since TikTok is popular with millions of young Americans.
Last week, Democratic senator Mark Warner said it was important the US government do more to make clear what it believes are the national security risks from TikTok.
“It’s going to be incumbent on the government to show its cards in terms of how this is a threat,” Senator Warner said.
TikTok and CFIUS have been negotiating for more than two years on data security requirements. TikTok said it has spent more than $US1.5 billion ($2.3 billion) on rigorous data security efforts, and rejects spying allegations.
TikTok said on Wednesday that “the best way to address concerns about national security is with the transparent, US-based protection of US user data and systems, with robust third-party monitoring, vetting, and verification”.
Last week, the White House backed legislation by a dozen senators to give the administration new powers to ban TikTok and other foreign-based technologies if they pose threats to national security. It could give the Biden administration new ammunition in court if it seeks to ban TikTok.
White House national security adviser Jake Sullivan praised the bipartisan bill, saying it “would strengthen our ability to address discrete risks posed by individual transactions, and systemic risks posed by certain classes of transactions involving countries of concern in sensitive technology sectors”.
The House of Representatives Foreign Affairs Committee this month voted along party lines on a much broader bill aimed at TikTok, sponsored by Republican representative Michael McCaul, that Democrats said would require the administration to effectively ban TikTok and other subsidiaries of ByteDance.
Reuters, ABC