Biden administration tells Chinese TikTok owners to sell stakes in app or face possible US ban

The Biden administration is threatening a potential U.S. ban on TikTok if its Chinese owners refuse to sell their stakes in the video-sharing app, a source close to the company told NBC News Thursday.

The source, however, warned that the company does not view the administration’s decision as a final order. Negotiations between TikTok and US government officials have been going on for years.

The administration’s demand, first reported by the Wall Street Journal, signals a major shift in US stance on Beijing-based ByteDance Ltd., which owns the popular video-sharing app.

The White House and Treasury Department declined to comment on NBC News.

A TikTok spokesperson said in a statement: “If the goal is to protect national security, the takeover will not solve the problem: the change of ownership will not impose any new restrictions on data flows or access to them. The best way to address national security concerns is to transparently protect US user data and US-based systems with the robust third-party monitoring, validation, and verification that we are already implementing.”

Any disposal of ByteDance Ltd. must be approved by the Chinese government. On Thursday, a Foreign Office spokesman said the US has not provided any evidence that TikTok poses a threat to its national security.

“The US side must stop spreading false information on the issue of data security, stop the unreasonable suppression of relevant enterprises, and provide an open, honest, fair and non-discriminatory business environment for enterprises of all countries so that they can invest and work in the United States,” spokesman Wang Wenbin said at the regular briefing.

Brooke Oberwetter, a spokesperson for TikTok, told NBC News last week that the Biden administration already has the power to control the app through the Committee on Foreign Investment in the United States.

News of the administration’s demand comes a week after the White House approved a bipartisan bill in Congress that would allow the federal government to regulate and even ban technology made abroad, including TikTok. TikTok chief executive Show Zi Chu is due to testify before Congress next week.

In late December, Biden signed into law a law banning the use of TikTok on government devices.

Republicans have repeatedly criticized the Biden administration for handling TikTok-related security issues. That criticism intensified last month when some GOP critics tried to link the app to a suspected Chinese spy balloon that flew across the United States.

Opponents of a potential TikTok ban counter that banning the app from phones in the US is not a comprehensive solution to data security concerns.

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