Senators pressure CFIUS to wrap up TikTok probe with strict restrictions, potentially even separating it from its Chinese parent company

Senators pressure CFIUS to wrap up TikTok probe with strict restrictions, potentially even separating it from its Chinese parent company

Shou Zi Chew, chief executive officer of TikTok Inc., speaks during the Bloomberg New Economy Forum in Singapore, on Wednesday, Nov. 16, 2022. The New Economy Forum is being organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News. Photographer: Bryan van der Beek/Bloomberg via Getty Images

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The panel reviewing TikTok’s national security risks is facing heightened pressure to wrap up its investigation of the popular video-sharing app and impose strict restrictions on whether and how the company can continue to operate in the U.S.

Two senators on either side of the aisle sent a letter to Janet Yellen, Treasury Secretary and Chair of the Committee on Foreign Investment in the U.S. (CFIUS), on Thursday, urging the panel “to swiftly conclude its investigation and impose strict structural restrictions between TikTok’s American operations and its Chinese parent company, ByteDance, including potentially separating the companies.”

The lawmakers, Sens. Richard Blumenthal, D-Conn., newly named chair of the Senate Judiciary subcommittee on privacy, and Jerry Moran, R-Kan., a member of the Senate Select Committee on Intelligence, said TikTok’s ability to collect troves of data combined with its ability to alter its algorithm to push or suppress certain posts makes it particularly concerning.

The lawmakers pointed to media reports finding TikTok employees had spied on American journalists and leaked internal audio that showed China-based ByteDance employees accessed U.S. user data. ByteDance fired four employees who it said improperly accessed the information on U.S. journalists. The company has said U.S. user data is not stored in China and that it continually tests its security measures.

That kind of access would be particularly worrying since China’s national security laws allow it to compel companies based there to hand over internal information if the government believes there is a national security issue at play. Earlier on Thursday, the Department of Justice’s Deputy Attorney General Lisa Monaco said she does not use TikTok for that reason, and would not advise others to use it either. The Justice Department is a member of the multi-agency committee reviewing the company.

CFIUS’ probe into TikTok stems from ByteDance’s 2017 acquisition of U.S. company The group is empowered to investigate foreign investments and transactions with potential national security risks.

But the investigation has dragged on for years, with solutions proving difficult to finalize and some intelligence officials still raising concerns about the potential for the Chinese government to access U.S. user data and manipulate consumers.

Blumenthal and Moran warned CFIUS against making a deal that would only require TikTok and ByteDance to alter certain practices.

“Moreover, monitoring and hosting requirements will never address the distrust earned from ByteDance’s past conduct,” the lawmakers wrote. “At a minimum, CFIUS should ensure that executive decision making about the platform is based in the United States and fully free from coercive influence from Beijing. It must also ensure that decisions about, and access to, all personal data, algorithms, and content moderation relating to American users is out of the reach or influence of the Chinese government.”

“CFIUS is committed to taking all necessary actions within its authority to safeguard U.S. national security,” a Treasury spokesperson said in a statement. “Consistent with law and practice, CFIUS does not publicly comment on transactions that it may or may not be reviewing.”

A TikTok spokesperson declined to comment on the letter.

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(With Inputs from cnbc)

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