US TikTok May Split From Chinese Owner ByteDance to Avoid Ban


TikTok may split from its Chinese parent company ByteDance, to help address U.S. concerns about national security risks.

According to Bloomberg, TikTok’s U.S. leadership is mulling a possible split with Chinese parent company ByteDance.

A divestiture or separation from ByteDance could result in a sale of TikTok or the company going public via an initial public offering.

However, Bloomberg reports that the move is only being considered as a last resort, to be pursued only if the company’s existing proposal with national security officials does not get approved, according to people familiar with the matter.

Furthermore, the move by TikTok remains far from certain as the Chinese government would have to agree to such a transaction, according to the publication’s sources.

A Legal Limbo

The report comes as TikTok faces a potential nationwide ban in the U.S. The video-sharing app has been the subject of increasing scrutiny from U.S. lawmakers and regulators about its links to the Chinese government.

TikTok is currently in a legal limbo with the American government and is undergoing a national security review by the Committee on Foreign Investment in the United States.

Last year, the company agreed to implement several measures to address US officials’ security concerns.

TikTok’s lobbying efforts, which have been dubbed “Project Texas”, include bringing in American tech giant Oracle Corp to host U.S. user data and review its software. The video-sharing app will also appoint a three-person government-approved oversight board.

However, TikTok’s proposals have so far not assuaged U.S. regulators’ concerns about its parent company ByteDance’s connections with the Chinese Communist Party and the safety of Americans’ data.

“Neither a ban of TikTok nor a divestiture of TikTok from ByteDance does anything to address national security concerns about data transfers,” Brooke Oberwetter, a spokesperson for TikTok tells South China Morning Post.

“Under Project Texas, TikTok data for our U.S. users would be held to a significantly higher security standard than any comparable American company.”

The Threat of TikTok

There have been growing safety and security concerns around TikTok, which has one billion users and is the sixth most-used social media platform in the world.

In December, the U.S. banned TikTok on all federal government devices due to fears about potential spying by China.

Last week, the White House backed a congressional bill that would give the Biden administration new powers to ban TikTok and other foreign technologies that could pose security threats.

TikTok has also faced scrutiny outside of the U.S. Today, it was reported that TikTok could be banned on official government devices in the U.K.

According to The Times of London, the U.K.’s security minister Tom Tugendhat has not ruled out a full national ban of the video-sharing app.

“It will be addressed with the challenges we face, with the threats we face,” Tugendhat says.

Last week, Canadian Prime Minister Justin Trudeau banned TikTok on government-issued devices over fears that users’ data could be misused.

Meanwhile, in February, the European Commission, the executive power of the European Union (EU), banned its staff from using TikTok over security fears.

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