WASHINGTON — The Biden administration wants TikTok’s Chinese ownership to sell the app or face a potential ban, TikTok said Wednesday, as the White House toughens its stance to resolve national security concerns about the popular video service.
The new lawsuit to sell the app was served on TikTok in recent weeks, two people with knowledge of the matter said. TikTok is owned by the Chinese internet company ByteDance.
The move is a significant shift in the Biden administration’s stance toward TikTok, which has come under scrutiny for fears that Beijing could request Americans’ data from the app. The White House had been trying to broker a deal with TikTok that would apply new security measures to its data and remove the need for ByteDance to sell its shares in the app.
But the demand for a sale, along with White House support for legislation that would allow it to ban TikTok in the United States, toughens the administration’s approach. It goes back to the position of former President Donald J. Trump, who threatened to ban TikTok unless it was sold to an American company.
TikTok said it was weighing its options and was disappointed by the decision. The company said its security proposal, which involves storing American data in the United States, offers the best protection for users.
“If the goal is to protect national security, divestiture does not solve the problem: a change in ownership would not place new restrictions on data flows or access,” Maureen Shanahan, a TikTok spokeswoman, said in a statement.
TikTok CEO Shou Zi Chew is scheduled to testify before the House Committee on Commerce and Energy next week. He is expected to face questions about the app’s links to China, as well as concerns that it offers content that is harmful to young people.
A White House spokeswoman declined to comment, as did a spokeswoman for the Treasury Department, which has led negotiations with TikTok. The Justice Department also declined to comment. The demand for a sale. previously reported by The Wall Street Journal.
TikTok, with 100 million users in the US, is at the center of a battle between the Biden administration and the Chinese government for technological and economic leadership, as well as national security. President Biden has launched a sweeping campaign against China with huge funding programs to increase domestic production of semiconductors, electric vehicles, and lithium batteries. The administration also banned Chinese telecommunications equipment and restricted US exports of chip-making equipment to China.
The fight over TikTok began in 2020 when Trump said he would ban the app unless ByteDance sold its stake to an American company, a move recommended by a group of federal agencies known as the Committee on Foreign Investment in the United States, or CFIUS. .
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The Trump administration finally seemed to reach an agreement for ByteDance to sell part of TikTok to Oracle, the American cloud computing company, and Walmart. But the potential transaction never came to fruition.
CFIUS staff and TikTok continued to negotiate an agreement that would allow the app to operate in the United States. TikTok submitted a major draft of an agreement, which TikTok has called Project Texas, in August. Under the proposal, the company said it would store data belonging to US users on servers run by Oracle within the United States.
TikTok officials have not heard back from CFIUS officials since they submitted their proposal, the company said.
In that vacuum, concerns about the application have intensified. States, schools, and Congress have enacted bans on TikTok. Last year, a company investigation found that China-based ByteDance employees had access to the data of American TikTok users, including reporters.
Brendan Carr, a Republican at the Federal Communications Commission, said the administration’s new lawsuit was a “good sign” that the White House was taking a harder line.
“There is a bipartisan consensus that we cannot compromise US national security when it comes to TikTok, so I hope the CFIUS review is now quickly concluded in a way that protects US interests,” Carr said.
The White House last week backed a bipartisan Senate bill that would give it more power to deal with TikTok, including banning the app. If passed, the legislation would give the administration more leverage in its negotiations with the app and potentially allow it to force a sale.
Any effort to ban the app or force its sale could face a legal challenge. Federal courts ultimately ruled against Trump’s attempt to block the app from appearing in the Apple and Google app stores. And the American Civil Liberties Union recently condemned legislation to ban the app, saying it raises First Amendment concerns.