TikTok may face U.S. ban if Chinese language house owners do not divest, firm says


The Biden administration has demanded that TikTok’s Chinese language house owners divest their stakes within the widespread video app or face a potential U.S. ban, the corporate informed Reuters on Wednesday.

The transfer, first reported by the Wall Avenue Journal, is probably the most dramatic in a sequence of latest steps by U.S. officers and legislators who’ve raised fears that TikTok’s U.S. consumer knowledge might be handed on to China’s authorities. ByteDance-owned TikTok has greater than 100 million U.S. customers.

It’s the first time beneath the administration of U.S. President Joe Biden {that a} potential ban on TikTok has been threatened. Biden’s predecessor, Donald Trump, tried to ban TikTok in 2020 however was blocked by the courts.

TikTok spokesperson Brooke Oberwetter informed Reuters that the corporate had just lately heard from the U.S. Treasury-led Committee on Overseas Funding in the USA (CFIUS), which demanded that the Chinese language house owners of the app promote their shares, and stated in the event that they did not, they’d face a potential U.S. ban of the video app.

The Journal stated 60 per cent of ByteDance shares are owned by world buyers, 20 per cent by staff and 20 per cent by its founders.

Previous divestment proposal

CFIUS, a robust nationwide safety physique in 2020 had unanimously advisable that ByteDance divest TikTok.

“If defending nationwide safety is the target, divestment would not clear up the issue: a change in possession wouldn’t impose any new restrictions on knowledge flows or entry,” Tiktok’s Oberwetter stated in a press release.

The White Home declined to remark.

TikTok Chief Govt Shou Zi Chew is because of seem earlier than U.S. Congress subsequent week. It is not clear if the Chinese language authorities would approve any divestiture.

Any U.S. ban would face important authorized hurdles.

WATCH | About that TikTok ban on authorities units: 

Why was TikTok banned on authorities units? | About That

Ottawa simply banned TikTok on all Canadian authorities units. Andrew seems to be at why the app that’s so widespread with Gen Z is inflicting concern on the federal degree.

TikTok rejects spying allegations

TikTok and CFIUS have been negotiating for greater than two years on knowledge safety necessities. The video app firm stated it has spent greater than $1.5 billion US on rigorous knowledge safety efforts and rejects spying allegations.

TikTok stated on Wednesday that “the easiest way to handle considerations about nationwide safety is with the clear, U.S.-based safety of U.S. consumer knowledge and methods, with strong third-party monitoring, vetting, and verification.”

Final week, the White Home backed laws by a dozen senators to provide the administration new powers to ban TikTok and different foreign-based applied sciences in the event that they pose nationwide safety threats.

It may give the Biden administration new ammunition in court docket in the event that they sought to ban the app.

White Home Nationwide Safety Adviser Jake Sullivan praised the bipartisan invoice, saying it “would strengthen our capacity to handle discrete dangers posed by particular person transactions, and systemic dangers posed by sure courses of transactions involving nations of concern in delicate expertise sectors.”

The U.S. Home of Representatives Overseas Affairs Committee this month voted alongside occasion strains on a invoice sponsored by Republican Consultant Michael McCaul to provide Biden the ability to ban TikTok.

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