Report: U.S. threatens TikTok ban unless Chinese owner divests

The U.S. government is reportedly stepping up pressure on TikTok to cut any possible ties to the Chinese government.

According to Reuters, the Biden administration is telling ByteDance, the Chinese company which owns TikTok, that if it does not sell its shares in the popular short video platform, TikTok may face a ban in the U.S. A TikTok spokesperson told Reuters that U.S. Treasury-led Committee on Foreign Investment in the United States (CFIUS) passed on the demand.

The U.S. federal government, as well as 30 U.S. states, have already banned TikTok from any governmental devices or systems, due to concerns sensitive user data could be furnished to the Chinese government.

Both TikTok and the Chinese government have publicly denied any security risks for U.S. users. The White House declined to comment on the Reuters report. Read more here.

TikTok concerns span two U.S. administrations

The Biden administration has been consistently continuing to express serious regulatory concerns which began under the Trump administration. Citing possible ByteDance connections to the Chinese Communist Party, the Trump administration had been actively attempting to ban TikTok from operating in the U.S. unless it established a separate business with at least partial U.S. ownership.

In a June 2022 tweet, Federal Communications Commission (FCC) commissioner Brendan Carr publicly called on Apple and Google parent Alphabet to remove the TikTok app from their app stores. In response, TikTok publicly said 100% of its U.S. user traffic is now being routed to U.S.-based Oracle Cloud infrastructure as a default storage location and that it is developing additional steps to ensure the security of U.S. user data.

In December 2022, Sen. Marco Rubio (R-FL) introduced bipartisan legislation to ban TikTok from operating in the United States. The “Averting the National Threat of Internet Surveillance, Oppressive Censorship and Influence, and Algorithmic Learning by the Chinese Communist Party Act (ANTI-SOCIAL CCP Act)” would block and prohibit all transactions from any social media company in, or under the influence of, China, Russia, and several other foreign countries of concern. However, the legislation’s sponsors have publicly stated that its main target is TikTok.

U.S. retailers, consumers cozy up to TikTok

Security concerns have not so far stopped U.S. consumers or retailers from actively pursuing shopping-related activities on the platform, which focuses on user-generated short-form videos.

Retailers including Walmart, Saks and Instacart have partnered with TikTok, and Bazaarvoice data indicates TikTok shopping levels grew 567% in 2021. And earlier in December, Amazon added a Tik Tok-inspired feature called Inspire to its shopping app. Inspire is designed to provide customers with a new way to discover ideas, explore products, and seamlessly shop from content created by other customers, influencers, and brands.

In addition, media reports have indicated TikTok is testing an e-commerce feature called TikTok Shop in the U.S. TikTok Shop currently operates in the U.K. and Southeast Asia. The pilot of TikTok Shop in the U.S. is said to be part of a larger effort by TikTok’s parent company, China-based ByteDance, to establish a robust livestream shopping business in the U.S. which it internally refers to as “Project Aquaman.”

[Read more: Report: TikTok pilots in-app commerce in the U.S.]