TikTok could separate from ByteDance, the Chinese technology firm which controls the exceedingly popular social media platform, in an effort to ease American lawmakers’ concerns about national security risks and data privacy.
Executives are weighing the sale of TikTok to another company or an initial public offering as a last resort should American officials reject an existing national security proposal offered by the company called Project Texas, according to a Tuesday report from Bloomberg. Authorities with the Chinese Communist Party would have to permit the divestiture.
The report comes as the Committee on Foreign Investment in the United States, a board composed of nine cabinet-level officials who weigh the national security implications of international investments into American companies, conducts a review of TikTok. Representatives from the Justice Department have reportedly not accepted the proposal from the firm.
“Neither a ban of TikTok nor a divestiture of TikTok from ByteDance does anything to address national security concerns about data transfers,” TikTok spokeswoman Brooke Oberwetter said in a statement to Bloomberg, adding that American users “would be held to a significantly higher security standard than any comparable American company” under Project Texas.
Sen. Richard Blumenthal (D-CT) and Sen. Jerry Moran (R-KS) recently exhorted Treasury Secretary Janet Yellen, who leads the Committee on Foreign Investment in the United States, to force the divestiture of TikTok. A letter from the lawmakers referenced the body mandating that Beijing Kunlun Company divest itself of homosexual dating site Grindr and health care platform PatientsLikeMe four years ago under the Trump administration.
Renewed controversy over TikTok comes amid worsening tensions in broader Sino-American relations sparked by at least one Chinese surveillance balloon recently traversing the continental United States. TikTok CEO Shou Zi Chew is scheduled to testify before members of the House Energy and Commerce Committee next week.
Beyond the prohibition of TikTok on federal devices issued by President Joe Biden and similar actions from multiple state governments, lawmakers have unveiled a number of bills that would force the divestiture of TikTok or otherwise significantly restrict the platform, which outranks other social media companies such as Meta and Twitter with respect to daily usage. Sen. Mark Warner (D-VA) and Sen. John Thune (R-SD) unveiled the Restricting the Emergence of Security Threats that Risk Information and Communications Technology Act, abbreviated as the RESTRICT Act, to grant the Commerce Department authority to review information communications and technology transactions that pose undue risk to American security.
Sen. Josh Hawley (R-MO) recently publicized allegations from a former TikTok employee who claimed that employees of the firm, including members of the Chinese Communist Party who are on the company’s payroll, can allegedly switch between Chinese and American data with “nothing more than the click of a button.” Workers allegedly use proprietary software created in China to reduce foreign scrutiny and let engineers “insert software backdoors,” Hawley described on the basis of the unnamed whistleblower’s account.
“I have seen first-hand China-based engineers flipping over to non-China datasets and creating scheduled tasks to backup, aggregate, and analyze data,” the whistleblower told Hawley. “TikTok and ByteDance are functionally the same company. They use the same data analysis tools and chat apps, and managers are in constant contact.”