Ruholamin Haqshanas
The US government has threatened to ban TikTok in the country unless the Chinese owners of the popular video sharing app sell their stakes.
The Committee on Foreign Investment in the US (CFIUS), an interagency authorized to review certain transactions involving foreign investment, made the sale demand, according to a report by the Wall Street Journal.
The move comes as regulators and policymakers in the US have accused TikTok of posing a national security risk, raising concerns that the social media platform could pass on data related to millions of US users to the Chinese government.
Founded in Beijing in 2012 by Zhang Yiming, TikTok is owned by Chinese technology company ByteDance.
According to the company’s executives, 60% of ByteDance shares are owned by global investors, 20% by employees, and another 20% by founders. However, the founders’ shares carry outsize voting rights, as is common with tech companies.
TikTok Says Forced Sale Won’t Solve Security Issues
TikTok spokesperson Brooke Oberwetter argued that a forced sale wouldn’t address any potential national security risk.
“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 spokesperson said that TikTok has pledged to spend $1.5 billion on a program to safeguard US user data and content from Chinese government access or influence.
However, critics have said that the plan isn’t sufficient due to China’s national security law, which requires companies there to turn over customer data if requested.
The US Keeps Trying to Ban TikTok
This is not the first time the US government has tried to force a sale of TikTok or ban the video sharing app citing national security concerns.
Back in 2020, Republican Donald Trump tried to ban the social media platform but that effort failed after TikTok and ByteDance went to court to block the proposed federal ban.
At the time, the companies argued that the ban would violate a 1988 amendment to the International Emergency Economic Powers Act, known as the Berman Amendment, which exempts cross-border communications from the president’s powers to address national security threats through economic sanctions.
Nevertheless, in December last year, the US banned TikTok on government devices. The move came as many states had either already banned the app on state devices or were in the process of doing so.
Notably, Senate lawmakers have recently introduced a legislative proposal that could expand the president’s authority in dealing with perceived threats from foreign-owned apps, according to an official press release.
Put forward by Sens. Mark Warner (D., Va.), the chairman of the Senate Intelligence Committee, and John Thune (R., S.D.), the Senate Republican whip, the legislation would require the Commerce Department to set up procedures to mitigate risks and potentially ban foreign technology.
The Biden administration has already endorsed the legislation.
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This article was written for Business 2 Community by Ruholamin Haqshanas.
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