This is the most dramatic move in a recent series of actions by US officials and lawmakers. If the Chinese owner does not comply, then there is a high chance that TikTok will be completely banned in the US.
According to a report by The Wall Street Journal, the Committee on Foreign Investment in the United States (CFIUS), the agency led by the US Department of Treasury that reviews cross-border transactions, has ordered ByteDance to sell shares in TikTok. After more than two years of negotiations, Washington still could not convince Washington that the short video app did not pose a national security risk. If ByteDance does not divest, then TikTok will face a ban in the US.
CFIUS has the authority to propose divestment because ByteDance acquired Musical.ly, a company with a significant presence in the US, which later merged into TikTok. This is not the first time ByteDance has received a request to separate from TikTok. In 2020, former US President Donald Trump issued two executive orders. One part was to ban TikTok in the US but was blocked by a federal judge that year and revoked by President Joe Biden in 2021. The other part demanded that ByteDance divest its US capital and delete all US user data. This section leads to the current divestment order from CFIUS.
“If protecting national security is the goal, divestment doesn’t solve the problem. Changing ownership will not impose any new restrictions on data flow or access. The good way The best way to address national security concerns is data protection and transparency about US users’ data systems, having the company’s headquarters in the US, with supervision, inspection, and verification. the third-party powerhouse that we’re rolling out,” a TikTok spokesperson told Nikkei Asia.
According to Ms. Caitlin Chin, a member of the Center for Strategic and International Studies (CSIS), the sudden call for divestment may reflect recent developments in the US, European Union (EU), UK, and Canada. . TikTok will also find it difficult to find buyers. Ms. Chin explained that since the US social media market is dominated by a few large companies, even if a direct competitor like Meta or YouTube wanted to buy TikTok, it could do the same. raised concerns about antitrust issues.
TikTok said it is working under a program called Project Texas to strengthen data security for users in the US, including moving all data of US users to the cloud system. Oracle Cloud. In addition, employees in China’s access to US data “is subject to a series of tight cybersecurity controls and authorization approval protocols established by the US-based security team of the US-based security firm.” TikTok surveillance”.
Nikkei quoted an informed source as saying that ByteDance is studying possible solutions to avoid having to sell TikTok. The company considered selling TikTok’s US operations to Microsoft, then Oracle and Walmart when it first faced a ban under the Trump administration.