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US investigating TikTok owner ByteDance over US$1 billion acquisition of social media app Musical.ly
- Beijing-based firm did not seek clearance from US committee that reviews deals by foreign acquirers for national security risks
- TikTok has been growing more popular among US teens amid growing tensions with China over trade and technology transfers
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The US government has launched a national security review of TikTok owner Beijing ByteDance Technology’s US$1 billion acquisition of US social media app Musical.ly, according to two people familiar with the matter.
While the acquisition was completed two years ago, US lawmakers have been calling in recent weeks for a national security probe into TikTok, concerned the Chinese company may be censoring politically sensitive content, and raising questions about how it stores personal data.
TikTok has been growing more popular among US teenagers at a time of growing tensions between the United States and China over trade and technology transfers. About 60 per cent of TikTok’s 26.5 million monthly active users in the United States are between the ages of 16 and 24, the company said earlier this year.
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The Committee on Foreign Investment in the United States (CFIUS), which reviews deals by foreign acquirers for potential national security risks, has started to review the Musical.ly deal, the sources said. TikTok did not seek clearance from CFIUS when it acquired Musical.ly, they added, which gives the US security panel scope to investigate it now.
CFIUS is 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.
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