A Highlight of the West-China Conflict – TipRanks Financial Blog

The Biden administration has threatened to ban TikTok, a wildly popular social media app, from use in the U.S. unless its Chinese owners sell their stake in the platform. The nationwide ban threat is a serious escalation in the dispute about data security, which has been ongoing for a number of years.

The issue isn’t purely a U.S.-China dispute, as other countries have also been increasingly wary of Chinese business expansion. The U.S. government and a succession of other Western countries have blocked TikTok on government-issued devices. For instance, the European Parliament, European Commission, and the EU Council have imposed bans on TikTok on staff devices, citing cybersecurity concerns.

Further, the United Kingdom and New Zealand have become the latest to join the growing list of countries that have recently issued orders banning the use of TikTok on government-issued devices as concerns grow over the app’s privacy and security. Now, it might be time for the 100 million U.S. users of the app to be weened from the addictive short video platform.

ByteDance Bites the Dust

TikTok is owned by the Chinese internet company ByteDance. Lawmakers have cited potential cybersecurity and political influence risks, saying that the Chinese government could order TikTok to collect data and information on Americans or influence what videos they are shown on the app.

In 2020, President Trump – who took the U.S.-China information security issues public – tried to ban TikTok in the U.S., but the action was halted by federal courts. Now, the bipartisan distrust of China-owned companies has increased so much that even if the divestment demand is met with a legal challenge – which it almost certainly will be – Biden’s administration will not be alone in this fight.

This time, the “sell or be banned” ultimatum is conveyed to the social video platform by the Committee on Foreign Investment in the United States (CFIUS), composed of the Departments of Treasury, Justice, Homeland Security, Defense and Commerce, and others. According to the media, the Justice Department and the FBI are investigating the surveillance of American TikTok users by ByteDance.

In addition, the Federal authorities have backing from a group of Silicon Valley executives coming from various prominent firms such as 137 Ventures and Founders Fund. The business leaders went as far as calling TikTok a “Chinese espionage operation” against the U.S. This…