TikTok says divestment will not help national security concerns
The Joe Biden administration has warned the Chinese owners of TikTok to give up their shares in the video-sharing platform or face a ban in the US, a new report has said.
The Committee on Foreign Investment in the US (CFIUS) made the sale demand recently, according to people familiar with the matter, reported The Wall Street Journal on Wednesday.
The CFIUS is a multiagency federal task force that oversees national security risks in cross-border investments.
The warning from the US government marks a shift in policy by the Biden administration towards the popular social media platform.
The government has faced calls from several Republicans who have accused the Biden administration of not taking a tough enough stance on the perceived national security threat posed by TikTok.
TikTok is owned by Beijing-based ByteDance Ltd and was founded in 2012 by internet entrepreneur Zhang Yiming, ByteDance chief executive Liang Rubo and others.
While 60 per cent of ByteDance shares are owned by global investors, 20 per cent by employees and 20 per cent by its founders, the founders’ shares carry outsize voting rights as is common with tech companies.
The company has dismissed the WSJ report and said disinvestment will not help national security.
“If protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access,” TikTok spokesperson Maureen Shanahan was quoted as saying to the Associated Press.
“The best way to address concerns about national security is with the transparent, US-based protection of US user data and systems, with robust third-party monitoring, vetting, and verification, which we are already implementing.”