TikTok Pushes for Extension on US Government's Divestment Deadline

The Nov. 12 deadline is fast approaching

Getty

With its future in the U.S. still in limbo, TikTok filed a petition late Tuesday calling for a review by the Committee on Foreign Investment in the United States, or CFIUS, on its divestment plan. TikTok said it’s looking for an extension and clarity on a Nov. 12 deadline, initially set by CFIUS, for the app’s parent company, Beijing-based Bytedance, to offload its U.S. operations due to data security concerns.

In its filing in the U.S. Court of Appeals for the D.C. Circuit, TikTok said the government’s push for TikTok to offload its U.S. assets was “arbitrary and capricious.”

TikTok said it had filed for a 30-day extension on this week’s deadline, but hasn’t heard back from government regulators in weeks. The popular app struck a deal in September for Oracle to become its “trusted technology provider” in the U.S., aiming to assuage President Trump’s concerns TikTok poses as a national security threat, but the deal still hasn’t received a final yay or nay. It’s unclear what will happen to TikTok in the U.S. if the deadline passes and its deal with Oracle hasn’t been approved.

“For a year, TikTok has actively engaged with CFIUS in good faith to address its national security concerns, even as we disagree with its assessment,” TikTok said in a statement. “In the nearly two months since the president gave his preliminary approval to our proposal to satisfy those concerns, we have offered detailed solutions to finalize that agreement – but have received no substantive feedback on our extensive data privacy and security framework.”

The company added that with Nov. 12 quickly approaching, it had “no choice but to file a petition in court to defend our rights and those of our more than 1,500 employees in the U.S.” TikTok said it still wants to work together with the Trump administration to “resolve the issues it has raised,” but that its petition was “a protection to ensure these discussions can take place.”

TikTok has about 100 million active users in the U.S., but the company has been under the regulatory microscope for the last few months. In August, President Trump signed an executive order banning the app unless its U.S. operations were sold to an American business.  The president pointed to “credible evidence” TikTok poses a national security threat due to its data collection policies.

Despite TikTok’s popularity, critics have grown increasingly concerned the app doubles as a data collection tool for China’s communist government. TikTok has denied ever sharing user data with Chinese authorities. But Stratechery’s Ben Thompson pointed out TikTok’s privacy policy explicitly says it “may share” user information “with a parent, subsidiary, or other affiliate of our corporate group,” which, based on how companies operate in China, means data can be sent to government authorities.

Now, TikTok is looking for more time as it waits to hear if its Oracle deal is approved. One condition of the deal is that TikTok’s U.S. business would file for an IPO within its first year; as TheWrap reported in September, TikTok Global, the offshoot of TikTok that would be formed if Oracle’s bid for the app’s American business is approved, would look to go public in 2021.

Source: Read Full Article