U.S. Pushes for TikTok Sale to Resolve National Security Concerns
WASHINGTON — The Biden administration wants TikTok’s Chinese ownership to sell the app or face a possible ban, TikTok said on Wednesday, as the White House hardens its stance toward resolving national security concerns about the popular video service.
The new demand to sell the app was delivered to TikTok in recent weeks, two people with knowledge of the matter said. TikTok is owned by the Chinese internet company ByteDance.
The move is a significant shift in the Biden administration’s position toward TikTok, which has been under scrutiny over fears that Beijing could request Americans’ data from the app. The White House had been trying to negotiate an agreement with TikTok that would apply new safeguards to its data and eliminate a need for ByteDance to sell its shares in the app.
But the demand for a sale — coupled with the White House’s support for legislation that would allow it to ban TikTok in the United States — hardens the administration’s approach. It harks back to the position of former President Donald J. Trump, who threatened to ban TikTok unless it was sold to an American company.
TikTok said it was weighing its options and was disappointed by the decision. The company said its security proposal, which involves storing Americans’ data in the United States, offered the best protection for users.
“If protecting national security is the objective, division doesn’t solve the problem: A change in ownership would not impose any new restrictions on data flows or access,” Maureen Shanahan, a spokeswoman for TikTok, said in a statement.
TikTok’s chief executive, Shou Zi Chew, is scheduled to testify before the House Energy and Commerce Committee next week. He is expected to face questions about the app’s ties to China, as well as concerns that it delivers harmful content to young people.
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A White House spokeswoman declined to comment, as did a spokeswoman for the Treasury Department, which has led the negotiations with TikTok. The Justice Department also declined to comment. The demand for a sale was reported earlier by The Wall Street Journal.
TikTok, with 100 million US users, is at the center of a battle between the Biden administration and the Chinese government over tech and economic leadership, as well as national security. President Biden has waged a broad campaign against China with enormous funding programs to increase domestic production of semiconductors, electric vehicles and lithium batteries. The administration has also banned Chinese telecommunications equipment and restricted US exports of chip-manufacturing equipment to China.
The fight over TikTok began in 2020 when Mr. Trump said he would ban the app unless ByteDance sold its stake to an American company, a move recommended by a group of federal agencies known as the Committee on Foreign Investment in the United States, or CFIUS.
The Trump administration eventually appeared to reach a deal for ByteDance to sell part of TikTok to Oracle, the US cloud computing company, and Walmart. But the potential transaction never came to fruition.
CFIUS staff and TikTok continued to negotiate a deal that would allow the app to operate in America. TikTok submitted a major draft of an agreement — which TikTok has called Project Texas — in August. Under the proposal, the company said it would store data belonging to US users on server computers run by Oracle inside the United States.
TikTok officials have not heard back from CFIUS officials since they submitted their proposal, the company said.
In that vacuum, concerns about the app have intensified. States, schools and Congress have enacted bans on TikTok. Last year, a company investigation found that Chinese-based employees of ByteDance had access to the data of US TikTok users, including reporters.
The White House last week backed a bipartisan Senate bill that would give it more power to deal with TikTok, including by banning the app. If it passed, the legislation would give the administration more leverage in its negotiations with the app and potentially allow it to force a sale.