The Biden administration has demanded that TikTok's Chinese owners divest their stakes in the popular video app or face a possible U.S. ban, the company told Reuters on Wednesday.
The move is the most dramatic in a series of recent steps by U.S. officials and legislators who have raised fears that TikTok's U.S. user data could be passed on to China's government. ByteDance-owned TikTok has more than 100 million U.S. users.
It is also the first time under the administration of Democratic President Joe Biden that a potential ban on TikTok has been threatened. Biden's predecessor, Republican Donald Trump, had tried to ban TikTok in 2020 but was blocked by U.S. courts.
TikTok spokesperson Brooke Oberwetter told Reuters that the company had recently heard from the U.S. Treasury-led Committee on Foreign Investment in the United States (CFIUS), which demanded that the Chinese owners of the app sell their shares, and said otherwise they would face a possible U.S. ban of the video app.
The Wall Street Journal first reported the move. ByteDance confirmed that 60% of its shares are owned by global investors, 20% by employees and 20% by its founders.
CFIUS, a powerful national security body, had unanimously recommended in 2020 that ByteDance divest TikTok. Under pressure from then-President Trump, ByteDance in late 2020 unsuccessfully sought to finalize a deal with Walmart and Oracle Corp to shift TikTok's U.S. assets into a new entity.