TikTok mulls separation from parent company ByteDance if US officials don’t approve proposal

Popular video-sharing platform TikTok is reportedly considering separation from parent company ByteDance. As per Bloomberg, the reason behind this probable split stems from concerns voiced by the United States over the app and the alleged national security risks it poses.

Citing people familiar with the matter, the publication reports that a “divestiture” is considered a last resort and will only be pursued if the company’s existing proposal with US national security officials is not approved. A divestiture can lead to a sale or an initial public offering (IPO).

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The short video format mobile app is currently under scrutiny. It is undergoing a national security review by the Committee on Foreign Investment in the United States (CFIUS).

Last year, in an attempt to placate hostile lawmakers, TikTok even agreed to the implementation of a number of plans nicknamed “Project Texas”.

CFIUS has, however, left TikTok unsure about its future in America. CFIUS members have allegedly been unwilling to accept TikTok’s proposal.

The agency has reportedly stalled in its process, leaving the app in a lurch, unsure about whether its attempts will be enough to ensure the continuation of TikTok’s operations in the US. 

CFIUS and TikTok have been holding negotiations ever since, with the app claiming it has already spent more than $1.5 billion on rigorous data security efforts.

National security body CFIUS had recommended that ByteDance divest TikTok back in 2020. The app has increasingly come under fire over fears that undermining Western security interests user data can end up in the Chinese government’s hands. TikTok, however, rejects the spying allegations.

(With inputs from agencies)

 

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