The Biden administration has demanded that TikTok”s Chinese owners divest their stakes in the popular video app or face a possible US ban, the company told Reuters on Wednesday.
The move, first reported by the Wall Street Journal, is the most dramatic in a series of recent steps by US officials and legislators who have raised fears that TikTok’s US user data could be passed on to China’s government. ByteDance-owned TikTok has more than 100 million U.S. users.
It is the first time under the Biden administration that a potential ban on TikTok has been threatened.
TikTok spokesperson Brooke Oberwetter told Reuters that the company had recently heard from the US Treasury-led Committee on Foreign Investment in the United States (CFIUS), which demanded that the Chinese owners of the app sell their shares, and said otherwise they would face a possible US ban of the video app.
The Journal said 60% of ByteDance shares are owned by global investors, 20% by employees and 20% by its founders.
“If protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access,” Tiktok’s Oberwetter said in a statement.
The White House declined to comment.
In August of 2020, then-President Donald Trump signed an executive order giving Americans 45 days to stop doing business with ByteDance, saying Chinese tech operations may be used for spying.
In December, the US House of Representatives Committee on House Administration banned TikTok from all House-managed mobile devices “due to a number of security risks”. In addition, more than 20 US states have banned TikTok from government devices.

In late February the White House gave government agencies 30 days to ensure they do not have TikTok on federal devices and systems.
Several days later, the US House Foreign Affairs Committee voted along party lines to give President Joe Biden the power to ban TikTok.