Tech And Science

US demands that Chinese firm ByteDance to sell its share in TikTok or face ban

US TikTok ByteDance Stocks

The Joe Biden administration is reportedly demanding that TikTok‘s owner, China-based ByteDance, sell its ownership in the short-video app or face a ban.

The White House’s warning, according to The Wall Street Journal, is an escalation from the limited bans and pending legislation that have been in the works for some time.

According to the article, the sale demand was made by the Committee on Foreign Investment in the United States.

According to TikTok executives, worldwide investors control 60% of ByteDance shares, employees own 20%, and the founders own 20%.

Zhang Yiming, ByteDance CEO Liang Rubo, and others established the startup in Beijing in 2012.

TikTok said in a statement that a “forced sale wouldn’t address the perceived 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,” a TikTok spokesperson was quoted as saying.

This week, a group of 12 US Senators announced a new bill, which now has White House support, that would give President Biden the authority to prohibit TikTok across the country.

The Restricting the Emergence of Security Threats that Risk Information and Communications Technology (RESTRICT) Act grants the US government new powers, including the ability to impose a ban, “against foreign-linked producers of electronics or software that the Commerce Department deems to be a national security risk,” according to CNN.

Senator Mark Warner (D-VA) introduced the bipartisan bill, which would allow the US Secretary of Commerce to prohibit foreign technologies and corporations from functioning in the US if they pose a threat to national security.

The bill applies to businesses in China, Cuba, Iran, North Korea, Russia, and Venezuela.

“Today, the threat that everyone is talking about is TikTok, and how it could enable surveillance by the Chinese Communist Party, or facilitate the spread of malign influence campaigns in the US. Before TikTok, however, it was Huawei and ZTE, which threatened our nation’s telecommunications networks,” Warner said in a statement.

“We need a comprehensive, risk-based approach that proactively tackles sources of potentially dangerous technology before they gain a foothold in America, so we aren’t playing Whac-A-Mole and scrambling to catch up once they’re already ubiquitous,” he added.