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The Biden administration is demanding that Chinese-owned TikTok be sold, or the popular video app could face a ban in the US, according to a TikTok spokesperson.
It’s unclear if federal officials have given TikTok a deadline to find a buyer. Still, it’s a major escalation by White House officials who have grown increasingly concerned about the security of Americans’ data on the app used by more than 100 million Americans.
It is the first time the Biden administration has explicitly threatened to ban TikTok. President Trump attempted to shut down the TikTok business, but the actions were stopped by federal courts. The new lawsuit from US officials will almost certainly be met with a legal challenge from TikTok.
The company is “disappointed with the result,” the TikTok spokesperson said, about the new lawsuit from US officials.
An American company acquiring TikTok would require the blessing of Chinese officials, who for years have been hostile to the idea of selling their first global social media hit.
For two years, the Committee on Foreign Investment in the US, or CFIUS, has been examining whether US data is properly protected.
In response, TikTok pledged to spend $1.5 billion in a plan known as “Project Texas,” which would enact a stronger firewall between TikTok and its parent company’s employees in Beijing.
The plan is based on monitoring data from Texas-based software company Oracle. It also includes independent monitors and auditors to ensure that neither the corporate owner ByteDance nor Chinese officials can access US user data.
At first, CFIUS appeared to be pleased with the security measures TikTok was putting in place, even though the deal had not been formally approved.
Now, however, CFIUS has rejected TikTok’s proposal and is demanding that ByteDance sell the app, something ByteDance has strenuously resisted for years.
During the Trump administration, a media outlet aligned with the Chinese Communist Party called a forced divestment in the US tantamount to “open robbery”.
TikTok CEO Shou Zi Chew is scheduled to testify before the House Committee on Commerce and Energy next Thursday. this is coming after a bipartisan bill was unveiled earlier this month that would give President Biden the authority to ban TikTok.
CFIUS’s demand that TikTok get rid of ByteDance would not resolve data concerns lawmakers have with the app, Oberwetter said.
“National security concerns are best addressed with transparent, US-based protection of US user data and systems, with robust monitoring, investigation, and third-party verification , which we are already rolling out,” TikTok spokeswoman Brooke Oberwetter said. .
A Treasury Department spokesman declined to comment. ByteDance has not returned a request for comment.