President Trump to Force Chinese Investors to Sell TikTok
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President Donald Trump plans to employ the Council on Foreign Investment in the United States (CFIUS) to force China’s ByteDance Ltd. to divest its ownership of TikTok, Bloomberg reports. The announcement could come as early as Friday, and it follows a CFIUS security review of TikTok and its parent company last fall.
ByteDance bought Musical.ly Inc., a lip-sync app, for $1 billion in 2017 and merged it with TikTok to create the social media phenomenon it has become in the U.S. However, select politicians and some members of the public have found issues with the company’s privacy practices and ByteDance's alleged relationship with the Chinese Communist Party.
According to Bloomberg, “TikTok has been looking for ways to distance itself from its Chinese ownership, seeking to reassure the public that no data is stored on servers in China and that the app operates independently. ByteDance even appointed a CEO formerly of Walt Disney Co, Kevin Mayer, to run its operations in America.”
This process has recent precedent — earlier in 2020, Beijing Kunlun Tech sold LGBTQ dating app Grindr for more than $600 million after the CFIUS raised national security concerns in 2019.