TikTok faces an ultimatum from the Biden administration: sell or get banned

Something small: The US government is pressing ByteDance to sell TikTok over national security concerns. TikTok has offered a $1.5 billion security plan to protect user data from Chinese government influence, but the Biden administration is calling for a change in ownership. Would you sell ByteDance or risk losing 100 million US users?

Whitehouse has student TikTok’s Chinese owners have to abandon the company, or they will ban the popular app in the US. The Biden administration has it controversial relationship With ByteDance the owner of TikTok for the past few years, after it banned the app on government-owned devices due to national security concerns.

On Wednesday, anonymous sources told the Wall Street Journal that the Committee on Foreign Investment in the United States, or Cfius (pronounced sif-ee-ous), recently made the request after criticism that the administration did not take the threat to national security seriously enough. . The divestment would mean that Beijing-based ByteDance would have to sell TikTok to someone outside of China.

According to TikTok, investors around the world own 60 percent of the company. Its founders, Zhang Yiming, ByteDance CEO Liang Rubo, and others own 20 percent, including most of the voting shares. employees another 20 percent through stock options.

The company claims that forcing the sale would not mitigate the perceived security risks of the Biden administration.

“If protecting national security is the goal, divestment does not solve the problem: a change in ownership will not impose any new restrictions on data flow or access,” said TikTok spokeswoman Brooke Oberwetter.

Instead, TikTok is offering an alternative by pledging $1.5 billion to implement a system to protect American customers’ personal information and platform content from Chinese government influence and data collection.

“The best way to address national security concerns is transparent, US-based protection of US user data and systems, with robust third-party monitoring, auditing, and verification, which we already have in place,” Oberwetter said.

In fact, Reuters noted that TikTok is dead immigration US user data to Oracle servers in the US last June. ByteDance had hoped the transfer would satisfy Washington’s security concerns, but it appears not to have done so. The impeachment of TikTok CEO Shou Zi Chew is scheduled to take place before Congress next week.

The Biden administration and the Treasury Department, which Cfius heads, declined to comment on the alleged divestment request. However, the position taken by US officials has been unequivocal for more than two years.

Senior US officials, including Deputy Attorney General Lisa Monaco, continue to sound the alarm about China’s national security legislation. The law requires Chinese-owned companies to hand over customer data upon request, making Washington worry about possible surveillance by Beijing. Officials argue that even if TikTok implements its promised $1.5 billion security plan, the Chinese-owned company will still be at risk of data breaches and manipulation by the Chinese government.

Image credit: Anthony Quintano

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