Conflicts between Beijing and Washington don’t seem to be coming to an end at the moment. Since the beginning of the pandemic, the climate between the great powers has been heating up. Above all, China’s position on Russia in the war of aggression against Ukraine is a serious bone of contention for the White House.
But the increasingly authoritarian tendencies of China’s Politburo – President Xi Jinping recently secured broader powers in the People’s Congress – and the arming of the People’s Republic are worrying the US. Overflights by alleged Chinese spy balloons over the United States, including over a nuclear weapons depot, further exacerbated tensions.
If the dispute over the origin of the corona virus (“laboratory thesis”) has exploded recently, TikTok is the current focus. As the “Wall Street Journal” (“WSJ”) reported on Thursday, Washington presented Chinese parent company ByteDance with an ultimatum: Either ByteDance sells its shares in the app or TikTok will be banned from the US altogether. The ultimatum was issued by the American authority CFIUS. This is responsible for risk assessment of foreign investments for national security.
china upset
Beijing reacted angrily to pressure from Washington on Thursday. The US should stop the “unwarranted suppression” of the video app, according to Chinese Foreign Ministry spokesman Wang Wenbin. Washington has produced no evidence “that TikTok threatens US national security.” The issue of data security should not be used to “abuse state power and unfairly oppress companies from other countries,” Wang said.
TikTok confirmed the advancement of US authorities. A spokesman told the AFP news agency that a ban or sale is “unnecessary because neither option solves the industry’s biggest problems of data use and transfer”.
APA/AFP/Greg Baker US worried about stock size and Beijing headquarters
Furthermore, the company does not see itself as a subsidiary of a Chinese company, as ByteDance is 60% owned by Western investors and has its official headquarters in the Cayman Islands. However, critics also point out that the Chinese founders held higher voting rights with a 20 percent stake and that ByteDance has a large headquarters in Beijing.
TikTok fears for US users
The stakes are high for TikTok: About 130 million people use the app in the US. Of course, TikTok itself was already considering how the US government could be appeased. The best way is a third-party verified “US-based transparent protection of US user data”.
For months, the company has been trying to convince the US government with a model in which data is stored on servers in the US and access to them is monitored by US partners. This “Texas Project” would include having the app checked by software giant Oracle for every update before users can download it. In June, TikTok announced that “100% of US user traffic will be routed to Oracle Cloud Infrastructure”.
Tiktok has also proposed a similar model with three data centers in Ireland and Norway for Europe under the name “Project Clover”. Like many other countries and institutions, the EU Commission recently banned TikTok from its employees’ company cell phones.
Secession of last resort
The company also promised a series of measures to improve security. One has already invested US$1.5 billion in strict security measures. According to a report by financial news agency Bloomberg, the possibility of a ByteDance spin-off is also being considered. However, such disposal is intended only as a last resort. A spin-off can be accomplished through a sale or an IPO. But neither TikTok nor parent company ByteDance has commented on the report.
Concerns that China’s secret services could obtain user data via TikTok and manipulation plans are driving both Republicans and Democrats in the US. Even under US President Donald Trump, attempts have been made to force the sale of TikTok’s international business with threat of ban. But this was prevented by the US courts. Under Trump’s successor Joe Biden, the United States is now facing again.
Legal obstacles ahead
The US Senate last week introduced a bipartisan bill that would allow the US to “prevent certain foreign states from using technological services … in a way that threatens Americans’ confidential information and our national security.” Among other things, the Restrict Act gives the Secretary of Commerce new powers that would make it easier to ban the app. White House national security adviser Jake Sullivan praised the bipartisan bill, saying it would strengthen the ability to deal with risks “involving countries of concern in sensitive technology sectors”.
However, it is currently unclear whether a forced share sale or a ban would be legal. For example, civil rights organizations have pointed out that banning the app, which millions of US citizens use to exchange information every day, violates the Constitution’s First Amendment.