TikTok Sale Still in Trump-Spurred Review, White House Says

TikTok owner ByteDance Ltd. is in talks with U.S. regulators to address potential security concerns over data sharing as the company looks to avoid a repeat of the political firestorm last summer when it became a target of former President Donald Trump.

President Joe Biden’s administration is “comprehensively evaluating” risks to U.S. data from companies such as TikTok “and will address them in a decisive and effective fashion,” Press Secretary Jen Psaki said Wednesday during a briefing at the White House.

As discussions continue, the Biden administration asked a federal judge in Washington on Wednesday to put on hold the litigation over a ban on TikTok that was pursued by Trump.

The government “plans to conduct an evaluation of the underlying record justifying those prohibitions,” the Biden administration said in a court filing. “A review of the prohibitions at issue here may narrow the issues presented or eliminate the need for this Court’s review entirely.”

ByteDance representatives are speaking with the Committee on Foreign Investment in the U.S., or CFIUS, over security guarantees surrounding the company’s data, concerns about its source code and other matters related to TikTok’s operations in the U.S, according to the people familiar with the matter, who asked not to be identified discussing private deliberations. A ByteDance spokesman declined to comment.

The effort is aimed at ensuring that TikTok never again has to weather the scenario last fall when Trump sought to ban the app. Trump’s action was widely seen as politically motivated, linked to his hard-line approach to China. Former Treasury Secretary Steven Mnuchin oversaw an agreement under which ByteDance would sell its American assets to a group including Oracle Corp. and Walmart Inc., but the sale has been delayed after the Chinese company scored a series of legal victories.

TikTok didn’t come up during a more than 90-minute meeting in the Oval Office on Tuesday between Biden, the chief executive of Walmart, Doug McMillon, and other business leaders, according to three people familiar with the conversation.

Moves to follow through with the sale stalled as the November presidential election approached last fall, and the Trump administration largely stopped responding to efforts by all sides to complete the deal. The Biden administration is conducting a broader review of China policy and doesn’t see the issue as a priority for now, the people said.

“It’s a broad review that’s expanded beyond TikTok,” Psaki said Wednesday. But she said that “it’s not accurate that there is a new proactive step by the Biden White House.”

Trump gave his blessing in mid-September to a preliminary plan in which ByteDance, the Chinese parent company, would sell part of TikTok to Oracle, Walmart and U.S. investors Sequoia Capital, KKR & Co. and General Atlantic, creating a new independent company called TikTok Global. But that deal, quickly overshadowed by the U.S. election and rising Covid-19 cases, was never finalized.

The people said the Biden administration is taking its time reviewing the Trump administration’s China moves and deciding which need to be addressed immediately, and hasn’t ruled out any steps. Dow Jones reported earlier Wednesday that the Biden administration had shelved the deal indefinitely.

TikTok has filed multiple legal challenges against the government’s effort to ban its app, and several judges blocked the ban from taking effect. ByteDance declined Wednesday morning to comment on reports the deal had been shelved.

Citing U.S. national security concerns, the Trump administration ordered in August that the popular video-sharing app be sold to an American firm or face a ban in the U.S. Biden’s White House has outlined plans to review hard-line policies toward China that were a hallmark of Trump’s presidency. Those would include an interagency review trade tariffs and the delisting of certain Chinese companies that were enacted by Trump.

The Trump administration argued that Americans’ private data gathered through the app -- which has been downloaded more than 100 million times in the U.S. -- could be siphoned off to the authoritarian regime in China, something TikTok has said it would never do.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.