On Wednesday, TikTok said the Biden administration demands app’s Chinese owners spin off their shares, or they have to face a US ban as the White House hardens its stance towards resolving national security concerns.
What is the Complete Story?
A US multiagency panel known as the Committee on Foreign investment in the United States gave an ultimatum to TikTok that if its Chinese owners don’t spin off their shares, they have to face a US ban. The Biden administration wanted to strengthen its grip on resolving national security concerns by doing this.
It marks a possible turning point in the long-running negotiations between TikTok’s links to China and a social media company with over 100 million users in the United States.
According to the recent divestiture requested by the Wall Street Journal’s first report, TikTok confirmed that the Committee on Foreign Investment in the United States had contacted the company, and it didn’t dispute the Journal’s report.
How TikTok Reacted to this
Maureen Shanahan, the TikTok spokesperson, made a statement that if protecting national security is the main objective of the US, divestment is not going to solve the problem. She added that a change in ownership would not restrict data or access to the application.
However, the US-based protection of user data and systems with robust monitoring and verification is the best way to address national security concerns. And the US is already implementing it.
TikTok has been negotiating with CFIUS for many years regarding a deal that might allow the app to operate in the US. But there is fear in US officials’ eyes regarding allowing the app to work in the US that the Chinese government could use its national security laws.
Then it often benefits Chinese intelligence activities or influence campaigns.
Late last year, a legislation was passed by Congress and signed by President Joe Biden to block TikTok from US government devices. After growing suspicion among western governments towards the video sharing app, Canada and the European Union followed the legislation.
But so far, there has been no evidence regarding the Chinese government accessing the TikTok data. However, the social networking company addressed a policy ensuring US employees can only access US user data.
The company called it Project Texas that includes storing personal data with the US cloud giant Oracle. The company also launched a project in Europe named Project Clover.
Some lawmakers have given the power to the Biden administration to impose a nationwide ban on TikTok. The argument will likely continue next week as the company’s CEO, Shou Zi Chew, has to face a grilling.
According to a former CFIUS official, Harry Broadman, a shift has occurred in the opaque CFIUS talks. The exact nature of the movement still needs to be determined, Harry added.