US Treasury Secretary Steve Mnuchin said on Wednesday that TikTok was under a national security review and that his agency would make a recommendation to the president about the popular Chinese-owned video-sharing app this week. The comments marked the first time the US government has acknowledged that TikTok was under review by the Committee on Foreign Investment in the United States (CFIUS), which scrutinizes deals by foreign acquirers for potential national security risks and is led by Treasury.
"TikTok is under CFIUS review. We will be making a recommendation to the president this week so we have lots of alternatives," Mnuchin said. Reuters reported in November that the app's Chinese parent, Beijing ByteDance Technology Co was being probed by CFIUS over its $1 billion purchase of social media app Musical.ly after lawmakers raised concerns over how it stores personal data as well as allegations of censorship.
A TikTok representative said the company could not comment on CFIUS matters but added that TikTok was working to "develop a best-in-class security infrastructure" and promote a safe app experience. The committee can force ByteDance to unwind the deal, or take other measures to mitigate the national security threat. Reuters reported earlier on Wednesday that ByteDance has received a proposal from some of its investors, including Sequoia and General Atlantic, to transfer majority ownership of TikTok to them. Some ByteDance investors are valuing the popular app at about $50 billion.
Flanked by Mnuchin, President Donald Trump said before leaving the White House on a trip to Texas that "we are looking at TikTok." The company is under fire in Washington, as relations between the Trump administration and Beijing have grown chilly over the coronavirus and China's moves against Hong Kong. US Secretary of State Mike Pompeo said the administration was considering banning the app, and White House Chief of Staff Mark Meadows said earlier this month that action was coming in weeks.