Amid CFIUS Review, TikTok CEO Says Ownership Shouldn't Be a Concern

The head of TikTok said the U.S. shouldn't have concerns about its parent company, ByteDance, even as lawmakers said they believe the Chinese government can use the company to access sensitive data collected by the app. TikTok CEO Shou Chew said the app is not controlled by China and said it has built a firewall to prevent U.S. personal data from “unauthorized foreign access.”

"I don't think ownership is the issue here," Chew, speaking during a March 23 House Energy and Commerce Committee hearing, said in response to a question from Rep. Darren Soto, D-Fla., about whether TikTok would follow a divestment order from the Committee on Foreign Investment in the U.S. Instead of ownership, Chew said, "I think we need to address the problem of privacy," adding that the app is "making sure we’re protecting and fire-walling U.S. user data from unwanted foreign access."

CFIUS has reportedly demanded that ByteDance sell its shares in TikTok or face a potential U.S. ban of the app (see 2303160020), and Soto urged Chew to "start having that dialogue should that be where the president and the Congress end up going."

Chew told the committee that TikTok takes U.S. “national security” concerns “very, very seriously,” but said the U.S. has “misconceptions” about ByteDance, which is “not owned or controlled by the Chinese government.” He also noted that three of ByteDance’s five board members are American.

“Still, we have heard important concerns about the potential for unwanted foreign access to U.S. data and potential manipulation of the TikTok U.S. ecosystem,” Chew said, adding the app has “addressed” those concerns. “That's what we've been doing for the last two years, building what amounts to a firewall that seals up protected U.S. user data from unauthorized foreign access.”

“The bottom line is this,” he said: “American data stored on American soil by an American company overseen by American personnel.”

In a rare public statement, a CFIUS spokesperson on March 23 said the committee takes "all necessary actions within its authority to safeguard national security and will not clear any transaction unless it determines there are no unresolved national security risks."

Some transactions "can present data security risks -- including providing a foreign person or government with access to troves of Americans' sensitive personal data as well as access to intellectual property, source code, or other potentially sensitive information," the spokesperson said. The committee on a case-by-case basis "will ensure the protection of national security, including to prevent the misuse of data through espionage, tacking, and other means that threaten national security."

Rep. Frank Pallone of New Jersey, the committee's top Democrat, said the firewall mentioned by Chew won’t “be acceptable to me.” He said “the Beijing communist government will still control and have the ability to influence what you do,” pointing out TikTok hasn’t committed to stop selling the data it collects.

Committee Chair Cathy McMorris Rodgers, R-Wash., also dismissed Chew’s statement that China can’t access data collected by TikTok. She pointed to March 23 comments from a China Commerce Ministry spokesperson, who said the country would oppose any forced sale of TikTok.

The spokesperson said the “sale or divestiture of TikTok involves technology export, and administrative licensing procedures [that] must be performed in accordance with Chinese laws and regulations, and the Chinese government will make a decision in accordance with the law,” according to an unofficial translation of a news conference transcript.

“So the [Chinese Communist Party] believes they have the final say over your company,” Rodgers told Chew. “I have zero confidence in your assertion that ByteDance and TikTok are not beholden to the CCP.”