The Biden administration is demanding that TikTok’s Chinese owners sell their stakes in the video-sharing app or face a possible U.S. ban of the app, according to people familiar with the matter.
- According to WSJ, the move represents a major shift in policy on the part of the administration, which has been under fire from some Republicans who say it hasn’t taken a tough enough stance to address the perceived security threat from TikTok, owned by Beijing-based ByteDance Ltd.
- TikTok executives have said that 60% of ByteDance shares are owned by global investors, 20% by employees and 20% by its founders, though the founders’ shares carry outsize voting rights, as is common with tech companies.
- TikTok says its $1.5 billion security plan would essentially wall off its U.S. operations, with all data being stored in the U.S. The plan also calls for giving a U.S. company, Oracle Corp., the ability to access the company’s algorithmic code and flag issues for government inspectors.
- It wasn’t immediately clear what the next step by the U.S. would be, and the people familiar with the matter say a resolution could be months away. TikTok’s chief executive, Shou Zi Chew, is scheduled to appear before the House Energy and Commerce Committee next week to address lawmakers’ questions on the security issues.