TikTok Said to Be Subject of US National Security Investigation

ByteDance faces scrutiny over its acquisition of social media app Musical.ly

HIGHLIGHTS
  • ByteDance’s acquisition of Musical.ly was completed over two years ago
  • There are questions about how ByteDance stores users’ personal data
  • Officials have asked whether TikTok censors politically sensitive content
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The US government has launched a national security review of TikTok owner Beijing ByteDance Technology Co’s $1 billion (roughly Rs. 7,070 crores) acquisition of US social media app Musical.ly, according to three people familiar with the matter.

While the $1 billion (roughly Rs. 7,070 crores) acquisition was completed two years ago, US lawmakers have been calling in recent weeks for a national security probe into TikTok, concerned the Chinese company may be censoring politically sensitive content, and raising questions about how it stores personal data.

TikTok has been growing more popular among US teenagers at a time of growing tensions between Washington and Beijing over trade and technology transfers. About 60 percent of TikTok’s 26.5 million monthly active users in the United States are between the ages of 16 and 24, the company said this year.

  • TikTok Maker ByteDance Denies Reports It Is Planning Hong Kong Listing

The Committee on Foreign Investment in the United States (CFIUS), which reviews deals by foreign acquirers for potential national security risks, has started to review the Musical.ly deal, the sources said. TikTok did not seek clearance from CFIUS when it acquired Musical.ly, they added, which gives the U.S. security panel scope to investigate it now.

CFIUS is in talks with TikTok about measures it could take to avoid divesting the Musical.ly assets it acquired, the sources said. Details of those talks, referred to by CFIUS as mitigation, could not be learned. The specific concerns that CFIUS has could also not be learned.

The sources requested anonymity because CFIUS reviews are confidential.