US demands TikTok’s Chinese owner sells its stake in the app or it will be BANNED – as the company pledges to spend $1.5 billion to protect user data
- An interagency US task force has called for a change of ownership of TikTok
- Chinese laws require Chinese companies to share data with their 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 stake in the app.
It’s the first time the government has explicitly threatened a ban and marks a change in its stance on the platform, which Republicans say poses a national security threat to the way it collects data from U.S. citizens.
The demand was made by the Committee on Foreign Investments in the United States and says that TikTok’s parent company, ByteDance, is selling its stake in the US version of the app.
It’s unclear if federal officials have given ByteDance a deadline for sale.
Hilary McQuaide, a spokeswoman for TikTok, confirmed to DaiyMail.com that the request was made, but indicated the changes would not increase the security of US citizens’ data.
The Biden administration has threatened to ban TikTok in the US unless Chinese owner ByteDance sells its stake in the app. Pictured is Shou Zi Chew, CEO of TikTok
The request was made by the US Committee on Foreign Investments, chaired by Treasury Secretary Janet Yellen
“If protecting national security is the goal, a divestiture does not solve the problem: a change in ownership would not introduce new restrictions on data flow or access,” she said in a statement.
“The best way to address national security concerns is to provide transparent, US-based protection of US user data and systems with robust third-party monitoring, screening, and verification that we already implement,” 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 called Project Texas, which would see US users’ data shielded and monitored by Texas-based Oracle.
The plan would include independent monitors and auditors to ensure that neither ByteDance nor Chinese officials can access specific 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, Secretary of the Treasury, but its members include the heads of the Departments of Justice, Defense, State and Energy.
Critics of TikTok have said Chinese laws require Chinese-owned companies to share data with the Chinese government
ByteDance employees walk past the main building of ByteDance in Beijing in 2020. According to the executives, 60 percent of the shares are owned by foreign investors
In 2020, President Trump (pictured in 2020) gave Chinese company ByteDance 90 days to divest all assets used to support the popular TikTok app in the United States. His government’s efforts were blocked in court
TikTok executives have said that 60 percent of ByteDance stock is owned by global investors, 20 percent by employees, and 20 percent by its founders, according to The Wall Street Journal, which first reported the demand.
TikTok CEO Shou Zi Chew is scheduled to testify before the House Energy and Trade Committee next Thursday.
This motion comes after a dozen U.S. senators introduced a bipartisan bill last week giving President Biden the power to ban TikTok nationwide.
The Restrict Act would allow the US Department of Commerce to designate companies with foreign connections as national security risks.
Last December, the Senate passed legislation banning 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 this would violate the Berman Amendments, which allow the free flow of “intel material” from enemy countries.