By Emmanuel Legrand
The US Treasury Department, through its Committee on Foreign Investment in the United States (CFIUS), has launched a national security review of China's Beijing ByteDance Technology Co, which owns and operates popular video-sharing app TikTok, according to a report from Reuters. Under review is the $1 billion acquisition two years ago of US social media app Musical.ly by ByteDance, which re-branded the app TikTok. TikTok has 26.5 million users in the US alone. ByteDance's various apps have 1.5 billion monthly active users.
CFIUS normally reviews deals by foreign acquirers for potential national security risks but ByteDance did not seek clearance from CFIUS when it acquired Musical.ly. “While we cannot comment on ongoing regulatory processes, TikTok has made clear that we have no higher priority than earning the trust of users and regulators in the US. Part of that effort includes working with Congress and we are committed to doing so,” a TikTok spokesperson told Reuters.
The news comes as TikTok is facing increasing scrutiny from US lawmakers. In October, US senator Marco Rubio asked CFIUS to review ByteDance’s acquisition of Musical.ly. Senate Minority Leader Chuck Schumer and Senator Tom Cotton have asked Joseph Macguire, the acting director of national intelligence, for a national security probe on TikTok focusing on the app's usage of user data and concern that it could censor content seen by US users. Schumer called the probe a “validation of our concern that apps like TikTok...may pose serious risks to millions of Americans and deserve greater scrutiny.”
In addition, the National Music Publishers' Association (NMPA) has written to Sen. Rubio asking for Congress to investigate TikTok over concern that the Chinese-owned social network app was engaging in or allowing potential copyright infringement. The app is mostly unlicensed despite having a strong music content.
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