TikTok could be close to alleviating the federal government’s concerns over the video app’s data security, the New York Times reported today.
The U.S. Department of Justice and TikTok are currently in talks about how TikTok can change its data security policy to continue operating in the U.S., people familiar with the matter told the outlet, so that parent company ByteDance (headquartered in China) doesn’t have to sell the app.
The DoJ is spearheading the negotiations, but the U.S. Department of Treasury is also involved and the Committee on Foreign Investment in the United States (CFIUS), a group of federal agencies that reviews investments by foreign entities in American companies, would have to sign off on any potential agreement.
TikTok didn’t give NYT any comment on how talks were progressing, only saying the company was “confident” that it was “on a path to fully satisfy all reasonable U.S. national security concerns.”
The Treasury Department, on the other hand, seems wary about whether such a deal can “sufficiently resolve” national security issues, two unnamed sources told the NYT. The uncertainty could cause negotiations to drag out for months.
This news is the latest development in the federal government’s scrutiny over TikTok. Back in June, a Buzzfeed report leaked audio recordings of meetings among TikTok employees based in China. Buzzfeed alleged those employees have had access to sensitive U.S. user data.
Shortly after the report went live, Federal Communications Commissioner Brendan Carr urged Apple and Google to remove the app from their respective stores, claiming TikTok is involved in “extensive data harvesting.”
Speculation about data sharing prompted a group of U.S. senators to reach out to TikTok CEO Shou Zi Chew, requesting answers about the company’s data practices.
Chew in turn replied to the senators saying the Buzzfeed report is “not supported by facts” and that the leaked audio pertained to a discussion on how TikTok can safeguard U.S. user data.
TikTok previously announced it would store American user data in U.S.-based Oracle servers. While Oracle isn’t directly involved in the pending negotiations, a source told NYT, the cloud company has been consulted by the federal government.
Government skepticism over TikTok dates back to August 2020, when Former President Donald Trump issued an executive order to ban business with the app.
Trump’s efforts were unsuccessful, as President Joe Biden signed in June 2021 an executive order revoking that ban.
While TikTok faces federal hurdles, other companies are looking to make a move in the short form video market. YouTube just unveiled that starting next year, YouTube Shorts creators will be eligible for content monetization through the YouTube Partner Program.
Meta meanwhile has been pushing Instagram Reels, announcing in July new video posts shorter than 15 minutes will automatically be shared as Reels.
During second quarter earnings, Meta boasted Reels reached an annual revenue run rate of $1 billion. But a recent Wall Street Journal report cited an internal document from Meta, which suggested most Reels users “have no engagement whatsoever.”