WASHINGTON: The Biden administration has demanded that TikTok’s Chinese owners divest their stakes in the popular video app or face a possible ban in the United States, the company told Reuters on Wednesday (Mar 15).
The move, first reported by the Wall Street Journal, is the most dramatic in a series of recent steps by US officials and legislators who have raised fears that TikTok’s US user data could be passed on to China’s government.
ByteDance-owned TikTok has more than 100 million US users.
It is the first time under the administration of Democratic President Joe Biden that a potential ban on TikTok has been threatened. Biden’s predecessor, Republican Donald Trump, had tried to ban TikTok in 2020 but was blocked by the courts.
TikTok spokesperson Brooke Oberwetter told Reuters that the company had recently heard from the US Treasury-led Committee on Foreign Investment in the United States (CFIUS), which demanded that the Chinese owners of the app sell their shares, and said otherwise they would face a possible US ban of the video app.
The Journal said that 60 per cent of ByteDance shares are owned by global investors, 20 per cent by employees and 20 per cent by its founders.
CFIUS, a powerful national security body in 2020 had unanimously recommended that ByteDance divest TikTok.
“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,” Oberwetter said in a statement.
The White House declined to comment.