A source confirmed to Axios that the Biden administration has informed TikTok that it risks being banned in the United States if its Chinese parent company, ByteDance, does not sell its ownership in the American version of the app.
Why is TikTok being banned?
With over 100 million US users, TikTok has grown to be one of the most used smartphone applications in the nation. TikTok being banned means millions of regular Americans would be immediately impacted. A TikTok ban in the US could also lead to severe tensions between China and the US.
According to a TikTok source acquainted with the matter, the Committee on Foreign Investment in the United States (CFIUS), a regulatory body that assesses foreign investments in the US, informed TikTok that the government intended to prohibit the app in the US if its owners didn’t sell it.
Their outreach included a general overview of what a proposal for TikTok to stay in the United States would entail in order to allay government worries about national security.
Indeed, but considering that a sizable portion of ByteDance’s shares are owned by international investment companies, it is unclear to TikTok what CFIUS means by making its owners renounce their holdings, the TikTok source said, adding that CFIUS did not provide details or a written order.
The source claimed that the business wants to answer these concerns and will keep funding data security initiatives like Project Texas, a set of measures taken by TikTok and American software giant Oracle to separate the backend operations and code of their Chinese arm from their American arm.
TikTok asserts that divestiture wouldn’t address the government’s worries about 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,” it said in a statement, as reported by Axios.
”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.”
The argument put out by TikTok’s detractors is that Chinese law requires Chinese-owned enterprises to share data with the Chinese government and that the US cannot be guaranteed that American users’ data is secure as long as the company is under Chinese ownership.
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