The US government’s Committee on Foreign Investment in the US (CFIUS) is looking into the acquisition of US social media app Musical.ly, now TikTok, by Beijing ByteDance Technology in late 2017, Reuters reported, citing sources familiar with the matter. The move follows a letter sent by US senators last week sent to Joseph Macguire, acting director of national intelligence, expressing concerns about Tik Tok’s collection of user data. US Senate Minority Leader Chuck Schumer and Senator Tom Cotton requested a national security probe, saying they also wondered if China could censor content seen by US users. In addition, they suggested TikTok could be targeted by foreign influence campaigns. Other senators have expressed similar concerns.
TikTok allows users to create and share short videos with special effects. The company has said US user data is stored in the US, but the senators noted that ByteDance is governed by Chinese laws. TikTok also says China does not have jurisdiction over content of the app, which does not operate in China and is not influenced by any foreign government.
CFIUS, which makes sure acquisitions by international buyers do not pose potential national security risks, said ByteDance did not seek clearance from CFIUS when it acquired Musical.ly, paving the way for an investigation. Reports in 2017 put the acquisition price at USD 800million; Reuters said the deal was worth USD 1 billion.
CFIUS is now 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 as the reviews are still confidential.
“While we cannot comment on ongoing regulatory processes, TikTok has made clear that we have no higher priority than earning the trust of users and regulators in the U.S. Part of that effort includes working with Congress and we are committed to doing so,” a TikTok spokesperson said. ByteDance did not immediately reply to a request for comment.
Facebook CEO Mark Zuckerberg, whose product competes with TikTok particularly for younger users, has also criticized the app over censorship concerns. TikTok is very popular among US teens. About 60 percent of TikTok’s 26.5 million monthly active users in the country are aged 16-24, the company said earlier.
