TikTok, the Chinese-owned short-video app that has taken the world by storm, may be banned in the United States in the near future. The Biden administration, according to the Wall Street Journal, has issued an ultimatum to TikTok’s Chinese owners, requesting that they divest their stakes in the app or face a ban. The Committee on Foreign Investment in the United States (Cfius) made the request, which oversees national security risks in cross-border investments.
This is a significant escalation in the ongoing technological conflict between the United States and China. Republicans have accused the Biden administration of not being tough enough on TikTok, which they see as a threat to US security. The administration’s new strategy is in response to this pressure.
According to TikTok, 60% of ByteDance shares are owned by global investors, 20% by employees, and 20% by the company’s founders. However, as is common in tech companies, the founders’ shares have significant voting rights. TikTok has promised to spend $1.5 billion on a programme to protect user data and content in the United States from Chinese government access or influence, but this may not be enough to satisfy the Cfius.
A US ban on TikTok could benefit rivals such as Meta Platforms (parent company of Facebook and Instagram), YouTube (a subsidiary of Google), and Snap. However, a TikTok ban may result in Chinese authorities sanctioning American companies in response.
This is not the first time TikTok has come under fire from the US government. Former President Donald Trump issued several executive orders in an attempt to ban the app in 2020. The White House has already prohibited federal officials from using the app on their smartphones, and the European Commission and the Canadian government have made similar decisions regarding the mobile phones of their civil servants.
The situation is far from resolved, and it is unclear what TikTok’s Chinese owners will do in response to the Cfius’ ultimatum. In any case, this latest development serves as a reminder that the ongoing tech conflict between the United States and China is far from over, and that the consequences of this conflict could have far-reaching consequences for the global tech industry.