US Issues Ultimatum to TikTok: "Chinese Founder Must Sell Stake"

US CFIUS Notifies TikTok
"If Chinese Stake Not Divested, Full US Ban on Use"

The U.S. government has issued a final ultimatum to TikTok, a Chinese video-sharing platform, demanding that the Chinese founders sell all their shares.

[Image source=AP Yonhap News]

On the 15th (local time), the Wall Street Journal (WSJ) cited sources reporting that the Committee on Foreign Investment in the United States (CFIUS), under the U.S. Treasury Department, notified that if the founders of ByteDance, TikTok's parent company, do not sell their shares, TikTok will be completely banned from use within the United States.

WSJ analyzed, "Republican lawmakers have long criticized the U.S. administration for not taking a tough stance to address TikTok's security threats," adding, "This move shows that the U.S. administration's policy is changing."

Founded in 2012, ByteDance, TikTok's parent company, currently has global investors holding 60% of its shares. The remaining shares are held equally at 20% each by Chinese founders including Zhang Yiming and employees. The U.S. plans to have the Chinese side sell their shares so that TikTok can be free from the influence of the Communist Party.

The international community, including the U.S. and Europe, is concerned that TikTok might provide personal information to the Chinese Communist Party or be used as a tool to expand China's influence globally. Accordingly, the U.S. federal government and some state governments have banned the use of TikTok on government-owned devices. In the U.S. Congress, a bill has even been introduced to ban TikTok's business operations within the United States.

Western countries such as Europe and Canada have also issued TikTok bans. Last month, the European Union (EU) Executive Commission banned TikTok use on personal and work mobile devices registered with the commission, and the Canadian federal government has prohibited TikTok use on government-registered devices since last month.

TikTok immediately pushed back against the U.S. authorities' ultimatum. Brooke Oberwetter, TikTok spokesperson, stated, "A change in governance alone does not create any new sanctions related to data flow or access," and argued, "If the goal is national security protection, selling shares will not solve the problem." She emphasized, "The best way to address national security concerns is to enhance system transparency through third-party monitoring, investigation, and verification."

Shou Zi Chew, TikTok's Chief Executive Officer (CEO), is scheduled to appear before the U.S. Congress next week to answer questions related to security issues.

As Western countries including the U.S. continue to impose sanctions on TikTok, the company has pledged to invest $1.5 billion to block access or influence from the Chinese government and to introduce programs to protect the data and content of U.S. users. However, since Chinese companies are subject to the Communist Party's control, the general view is that this will not be effective. WSJ pointed out, "Critics say that plans alone are not enough. Chinese-owned companies must comply with government demands."

This content was produced with the assistance of AI translation services.