Biden administration demands TikTok’s Chinese owners hand over stake or face US ban | CNN Business

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The Biden administration has threatened to ban TikTok from the United States unless the app’s Chinese owners agree to spin off their share of the social media platform, TikTok acknowledged Wednesday evening.

The apparent ultimatum from a US multi-agency group known as the Committee on Foreign Investment in the United States (CFIUS) marks a possible turning point in long negotiations between federal officials concerned about TikTok’s ties to China and a very popular social media company with over 100 million US users.

The recent divestment request was first reported Wednesday by the Wall Street Journal; TikTok later confirmed to CNN that CFIUS had contacted the company, adding that it did not dispute the Journal’s report. But TikTok declined to discuss the details of the US government’s request, including details about its timetable.

“If protecting national security is the goal, divestment does not solve the problem,” TikTok spokeswoman Maureen Shanahan said in a statement. “A change of ownership would not impose new restrictions on data flows or access. National security concerns are best addressed with transparent, US-based protection of US users’ data and systems , with robust third-party tracking, verification and verification, which we are already implementing.”

TikTok has spent more than two years negotiating with CFIUS, a group made up of the Treasury, Justice, Homeland Security, Defense and Commerce departments, among others, over an agreement that could allow the app to continue operating in the US market. in the face of security and privacy issues. US officials have raised fears that the Chinese government could use its national security laws to pressure TikTok or its Chinese parent ByteDance to hand over the personal information of American TikTok users, which could benefit the activities of ‘Chinese intelligence or influencing campaigns.

The Treasury Department, which chairs CFIUS, declined to comment.

Talks with TikTok have dragged on without resolution, prompting criticism of the Biden administration from some US lawmakers who have pushed to ban the app through legislation.

Late last year, Congress passed and President Joe Biden signed legislation blocking TikTok from US government devices, following in the footsteps of numerous state governments. Since then, the European Union and Canada have also followed suit, reflecting growing suspicion among Western governments towards TikTok. But so far, there is no evidence that the Chinese government has accessed TikTok user data, and no government has enacted a broader ban targeting TikTok on personal devices.

TikTok has sought to address policymakers’ concerns with voluntary technical and bureaucratic safeguards that it says will help ensure that US users’ data can only be accessed by US employees. Part of this initiative, which the company calls Project Texas, involves storing personal data with US cloud giant Oracle. TikTok launched a similar push in Europe this month that it calls Project Clover.

That hasn’t stopped TikTok’s American critics. Some US lawmakers have moved to expand Biden’s authority to impose a nationwide ban on TikTok in addition to restrictions targeting US government devices, and independently of the CFIUS process, a proposal that the White House quickly welcomed. The heat is likely to intensify next week as TikTok CEO Shou Chew is expected to face a grilling before the House Energy and Commerce Committee.

Wednesday’s development suggests a shift in the typically opaque CFIUS talks, although the exact nature of the move remains unclear, according to Harry Broadman, a former CFIUS official.

“It could be that the divestment demand is the end of the discussion, but it’s also equally likely that the divestment is one component of what CFIUS wants in terms of safeguarding national security,” Broadman said. “Unless I’m in the CFIUS room, it’s very difficult to know where the discussions are, and frankly, what’s being said in public doesn’t often match what’s happening around the table.”