Rubio desires Biden to dam TikTok after Chinese language govt stake in subsidiary of mum or dad firm

In this image from July 13, 2021, the TikTok app can be seen on a smartphone. REUTERS / Dado Ruvic / Illustration

WASHINGTON, Aug. 17 (Reuters) – Republican Senator Marco Rubio called on President Joe Biden Tuesday to block the TikTok short video app in the United States after China acquired a stake in a key subsidiary of ByteDance, the Beijing-based parent company by Tick Tack.

The Biden administration withdrew a number of Trump-era executive orders in June that aimed to ban new downloads from WeChat and TikTok.

“Beijing’s aggressiveness makes it clear that the regime sees TikTok as an extension of the party state and that the US must treat it that way,” Rubio said in a statement.

“We also need to establish a framework of standards that must be met before a high-risk, overseas-based app can operate on American telecommunications networks and devices.”

The Department of Commerce is conducting a review ordered by Biden of the security concerns raised by these and other apps. A request for comment was not responded to.

“TikTok is run by an executive team based in the US and Singapore,” TikTok said in a statement to Reuters, adding that “the China-based subsidiary of ByteDance Ltd. referred to does not own TikTok.”

TikTok is not available in China.

Company records show that this year the Chinese government acquired a stake in and board seat in a ByteDance unit – a move that begs the question of how much leverage Beijing wants to exert on a technology sector suffering from an onslaught of regulatory action. Continue reading

The 1% stake in Beijing ByteDance Technology, which holds part of the licenses for Douyin, the Chinese version of TikTok, and the news aggregator Toutiao, was registered on April 30, according to the company information app Tianyancha.

It is held by WangTouZhongWen (Beijing) Technology, which is owned by three Chinese government entities, including a fund backed by the country’s main internet watchdog, the Cyberspace Administration of China (CAC), as reported by government shareholders demonstrate.

While there is a precedent for the Chinese government to hold stakes in tech companies, the news comes amid a surge in antitrust investigations and new rules for the industry that are turning a previously laissez-faire approach by the authorities on its head.

A ByteDance representative said Beijing ByteDance Technology “relates only to some of ByteDance’s video and information platforms in the Chinese market and holds some of the licenses they need to operate under local law.”

Reporting by David Shepardson and Yingzhi Yang; Additional coverage from Brenda Goh in Shanghai and Echo Wang in New York; Editing by Peter Cooney

Our Standards: The Thomson Reuters Trust Principles.

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