TikTok Says ByteDance Sale Wouldn’t Solve the ‘Problem’

A change in TikTok ownership wouldn’t solve the "problem" with the platform because it wouldn’t “impose any new restrictions on data flows or access,” TikTok said in a statement Friday.

The Biden administration reportedly gave Chinese-owned parent company ByteDance an ultimatum, telling it to sell TikTok and sever ties with Beijing, or face a U.S. ban. “If protecting national security is the objective, divestment doesn't solve the problem,” TikTok said Friday. “The best way to address concerns about national security is with the transparent, U.S.-based protection of U.S. user data and systems, with robust third-party monitoring, vetting, and verification, which we are already implementing.”

The Treasury Department’s Committee on Foreign Investment in the United States (CFIUS) is doing a security review of the company. The White House deferred questions to CFIUS Friday. The Treasury Department didn’t comment.

Rep. Mike Gallagher, R-Wis., chairman of the House Select Subcommittee on the Chinese Communist Party, in a joint statement Friday with ranking member Raja Krishnamoorthi, D-Ill., called the ultimatum “encouraging.” TikTok “under its current ownership and control structure” is an “unmitigable threat to our national security and needs to be dealt with as such,” they said. “We urge the administration to act accordingly, and for Congress to codify this decision in legislation, for not just TikTok, but all the TikToks to come.”

Legislators, including Gallagher and Krishnamoorthi, have offered various proposals for banning TikTok. Senate Intelligence Committee Chairman Mark Warner, D-Va., and Senate Communications Subcommittee ranking member John Thune, R-S.D., introduced the Restricting the Emergence of Security Threats that Risk Information and Communications Technology (Restrict) Act (see 2303080075) earlier this month. The bill was announced with the support of 12 senators, the White House and the Commerce Department. Warner and Thune announced support Friday from six new co-sponsors: Ben Ray Lujan, D-N.M.; Shelley Moore Capito, R-W.Va.; Tim Kaine, D-Va.; Kevin Cramer, R-N.D.; Richard Blumenthal, D-Conn.; and Chuck Grassley, R-Iowa. “We are pleased by the growing support for our sensible, bipartisan bill to establish a comprehensive, risk-based approach to tackle technology threats from countries like China and Russia,” Warner and Thune said in a statement.

Blumenthal and Grassley previously told us they were inclined to support the bill (see 2303130042). Sens. Jeanne Shaheen, D-N.H., and John Kennedy, R-La., also expressed interest. The current 18 sponsors are split evenly along party lines. The bill would allow the Commerce Department to “review, prevent, and mitigate information communications and technology transactions that pose undue risk to our national security.”

TikTok reportedly offered a proposal called Project Texas, for which the company is exploring a partnership with Texas-based Oracle. The concept would theoretically allow TikTok to separate its U.S. operations from ByteDance. The ultimatum is a “good sign” the administration isn’t buying TikTok’s Project Texas “compromise,” FCC Commissioner Brendan Carr tweeted Thursday: “After all, there is bipartisan consensus that we can't compromise on national security. The Admin should quickly conclude this review & safeguard US interests.”