Sell stake in TikTok or face ban, US demands from Chinese firm ByteDance

San Francisco, March 16

The Joe Biden administration has reportedly demanded that China-based ByteDance, the owner of TikTok, must sell its stake in the short-video making app or face a possible ban.

According to The Wall Street Journal, the White House's threat is an escalation from the limited bans and pending legislation that have been growing up for some time.

The Committee on Foreign Investment in the US made the sale demand, according to the report.

According to TikTok executives, 60 per cent of ByteDance shares are owned by global investors, 20 per cent by employees and 20 per cent by its founders.

The company was founded in Beijing in 2012 by Zhang Yiming, ByteDance CEO Liang Rubo and others.

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.

Last week, a group of 12 US Senators unveiled a new bill, that now has a White House backing, that will give President Biden power to ban TikTok nationwide.

Called the Restricting the Emergence of Security Threats that Risk Information and Communications Technology (RESTRICT) Act, it gives the US government new powers, up to and including a ban, "against foreign-linked producers of electronics or software that the Commerce Department deems to be a national security risk," reported CNN.

The bipartisan bill, led by Senator Mark Warner (D-VA), would empower the US Secretary of Commerce to ban foreign technologies and companies from operating in the US if they present a threat to national security.

The bill covers companies in countries, including 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.