Biden administration intervenes in TikTok ownership structure, just as Trump before

A triumph of free market?


The US government has demanded that Bytedance divest its stake in TikTok within the United States. The company confirms this to various media. If the company does not, it risks a possible ban on the app in the country.

The US Committee on foreign investment in the US, also known as Cfius, recently submitted the sales order to ByteDance, the Wall Street Journal reported. The company risks a possible ban if it doesn’t divest the U.S. branch of its video app. A TikTok spokesperson later confirmed the news to The New York Times and Reuters. Cfius already voted unanimously in 2020 for a split from TikTok within the USA, when then-President Trump tried to introduce a ban on the video app.

The possible sales order follows U.S. national security concerns. According to the US, data from TikTok users may be transferred to the Government of China. A Chinese security law obliges companies in that country to hand over such data if they are requested to do so. TikTok has previously proposed storing the data of US users at cloud company Oracle. Oracle may also inspect the code together with a supervisor. This includes the current source code and changes in updates.

The company claimed Wednesday night in a statement that a forced sale would not solve that perceived security risk. “A change of ownership would not impose new restrictions on data flows or access,” the company states. According to the Board of TikTok, 20 percent of the shares are owned by its Chinese owners. The staff would still own 20 percent and the remaining 60 percent would be from global investors. The White House did not respond to the request for comment.

Earlier this week, Bloomberg reported based on Insiders that Bytedance’s board is considering splitting off TikTok within the US. The company would consider that in the event that it does not reach an agreement with the government. In the meantime, the company would have been asked by the US government to divest TikTok within the country.

In early March, the US Congress passed a new law. This gives the US Department of Commerce the opportunity to ban foreign technologies and companies in the US if they pose a threat to national security. In addition, at the end of February, TikTok was banned on the phones of government officials.

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