China’s TikTok is considering separating from parent ByteDance to help address U.S. concerns about national security risks, Bloomberg News reported on Tuesday.
A divestiture, which could result in a sale or initial public offering, is considered a last resort, and to be pursued only if the company’s existing proposal with U.S. national security officials does not get approved, Bloomberg reported, citing people familiar with the matter.
Last year, the short-form video app agreed to undergo a national security review by the Committee on Foreign Investment in the United States (CFIUS). Under the plan, known as Project Texas, TikTok agreed to bring in Oracle Corp. to host U.S. user data and review its software, as well as appointing a three-person government-approved oversight board.
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CFIUS has stalled in its process, leaving TikTok unsure of whether its plans will be sufficient to continue operating in the country. Members of CFIUS from the Justice Department have been unwilling to accept TikTok’s proposal, Bloomberg reported.
The popular social media app has faced continual scrutiny from lawmakers who are concerned that ByteDance may be forced to share data with the Chinese government or could be used as an influence tool by China. Republican and Democratic lawmakers have proposed multiple bills that call for banning the video-sharing app or selling it.
TikTok CEO Shou Chew has been asked to testify before a House committee about the app’s data privacy and security practices, and the company’s relationship with the Chinese Communist Party.
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Recently, Republicans on the House Foreign Affairs Committee passed a bill that would give the Biden administration new power to ban TikTok and other apps deemed to pose a national security risk. The committee advanced the legislation on a 24-16 vote that went along party lines. It’s unclear when the bill may reach the House floor for a vote.
Federal agencies are in the process of deleting TikTok from government devices as required by a provision of the $1.7 trillion omnibus spending bill enacted in December that originally passed the Senate when it was introduced by Sen. Josh Hawley, R-Mo., as a standalone bill.
The law required the Biden administration’s Office of Management and Budget to provide guidance for agencies to implement the No TikTok on Government Devices Act by Feb. 27, 2023. The Office of Management and Budget (OMB) released its guidance on Feb. 27, which gives agencies 30 days to remove or block TikTok and develop limited exceptions for law enforcement or national security interests as permitted by the law.
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TikTok and ByteDance did not immediately respond to Fox News Digital’s requests for comment.
Fox News’ Paul Best contributed to this report.