ByteDance offers to divest TikTok’s US operations amid national security concerns

ByteDance offers to divest TikTok’s US operations amid national security concerns
Source: Reuters

On Saturday, it was revealed that Beijing-based internet giant ByteDance, which owns the popular video app TikTok, had agreed to divest the American operations of the app in an attempt to save the business from being banned.

Officials in the United States have argued that the large amount of personal user data that goes through TikTok could be fed to the Chinese government by its parent company, posing a risk to national security.

Because of this, President Trump said on Friday that his administration was weighing various protective measures against the app – including banning it.

Speaking to reporters on Air Force One, Trump said that an order to ban TikTok, which has attracted about 100 million users in the US alone, would likely be issued in the coming days

“Not the deal that you have been hearing about, that they are going to buy and sell … We are not an M&A (mergers and acquisitions) country,” said Trump.

Despite it’s Chinese parentage, TikTok has tried to establish itself as an American brand, pointing to its American CEO, Kevin Mayer – a former executive at Walt Disney Co. – and its prominent American investors.

Vanessa Pappas, the general manager of TikTok, released a video statement on the app following Trump’s announcement.

“We’re here for the long run,” she said. “Continue to share your voice here and let’s stand for TikTok.”

Secretary of State Mike Pompeo confirmed the Trump administration’s concerns in an interview on the Fox News Channel’s “Sunday Morning Futures.”

“These Chinese software companies doing business in the United States … are feeding data directly to the Chinese Communist Party, their national security apparatus. It could be their facial recognition pattern. It could be information about their residence, their phone numbers, their friends, who they’re connected to,” Pompeo said.

Pompeo went on to state that President Trump will take action in the coming days against “a broad array of national security risks that are presented by software connected to the Chinese Communist Party.”

“For a long time, a long time, the United States just said, well goodness, if we’re having fun with it or if a company can make money off of it, we’re going to permit that to happen. President Trump has said enough and we’re going to fix it,” he added.

ByteDance had previously offered to reduce their ownership of TikTok and sell a majority stake of the app to American investors, but the Trump administration had rejected their proposal.

ByteDance then proposed a new deal in which they would sell the business completely and Microsoft Corp., which also owns the professional social media platform LinkedIn, would take over TikTok’s operations in the US and be responsible for the protection of TikTok’s user data.

However, sources close to the matter have said that negotiations with Microsoft have been paused, but that the door remains open for Microsoft or other independent US companies to take over TikTok.

As the US and China continue to clash over issues including trade, the handling of the coronavirus pandemic, the erosion of Hong Kong’s autonomy and human rights issues in the Xinjiang region, many have expressed their support for transferring TikTok’s ownership away from China.

“What’s the right answer? Have an American company like Microsoft take over TikTok. Win-win. Keeps competition alive and data out of the hands of the Chinese Communist Party,” tweeted Republican Senator Lindsey Graham.