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10 December 2022

TikTok National-Security Deal Faces More Delays as Worry Grows Over Risks

John D. McKinnon, Aruna Viswanatha and Stu Woo

WASHINGTON—A potential deal between the Biden administration and TikTok—once expected around year-end—has run into more delays, according to people familiar with the situation, as worry grows over national-security concerns that U.S. officials say the popular app poses.

The review has dragged on amid a range of concerns, including how TikTok might share information related to the algorithm it uses to determine what videos to show users, and the level of trust Washington would need to place in the company, these people said. U.S. officials haven’t returned to TikTok with additional demands to address the recent concerns, some of the people said, leaving the path forward unclear.

A TikTok spokeswoman said the company is looking forward to a “timely conclusion to our agreement with the U.S. government, much of which we have already started implementing in earnest, so that we can put these concerns to rest.” She said the government hasn’t shared any remaining, unmet concerns with the company.

The delay is raising political risks for TikTok and its owner, Beijing-based ByteDance Ltd., as both Biden administration officials and newly-empowered congressional Republicans amp up their rhetoric on the company. ByteDance has spent around $9 million lobbying in Washington over the past two years, according to disclosure reports.

The company had previously reached a tentative deal with the U.S. government this summer, but senior U.S. officials, including at the Justice Department, don’t believe that proposed agreement is adequate, according to people familiar with the matter.

The U.S. side of the negotiations is being led by the Committee on Foreign Investment in the U.S., a secretive government panel that reviews business deals for security concerns. The talks have been aimed at reducing Chinese government influence on the U.S. operation, without completely severing TikTok’s Chinese ties, according to people familiar with the discussions.

Both sides had broadly agreed that TikTok’s data on U.S. users will be stored on Oracle Corp. servers in the U.S., people familiar with the deal said. TikTok has said it expects to delete U.S. users’ private data from its own data centers in Virginia and Singapore as it pivots to fully store data with Oracle cloud infrastructure.

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It has also said that access to U.S. data by anyone outside of a newly set-up division that governs U.S. data security would be limited by and subject to its protocols, monitored and overseen by Oracle.

TikTok’s defenders say the agreement would give the U.S. government control of and access to much more information about TikTok than they have with any U.S. social-media company.

But some administration officials have sought to make any TikTok security agreement tougher in some respects in response to what they say are growing concerns over TikTok’s access to consumer data and its potential use for influence operations, according to the people familiar with the matter. Republicans, meanwhile, have begun pushing to ban the app altogether.

TikTok says it doesn’t collect search and browsing history outside the TikTok app, according to the spokeswoman. The company does collect information within the app so it functions correctly, she said, like returning relevant search results and ensuring a user isn’t served up the same videos repeatedly.

Former President Donald Trump sought to ban TikTok unless it was put under U.S. ownership. President Biden rescinded those orders after taking office, saying they were unenforceable in the wake of successful legal challenges.

He then promised a plan to address the security risk from TikTok and other apps based in adversarial nations. The deal being hashed out between TikTok and the administration is part of that broader plan. Another piece—the administration’s release of more general rules for data-handling by apps based in potentially hostile countries—could happen soon, according to some people familiar with the matter.

FBI Director Christopher Wray cited the possibility the Chinese government could use TikTok to collect data on U.S. users.

Deputy Attorney General Lisa Monaco recently said that Chinese companies connected to the country’s intelligence bureaucracy “shouldn’t be trusted to securely handle our sensitive personal data and communications.”

Recently, senior government officials have voiced strong concerns over security issues associated with TikTok.

“We, the FBI, do have national-security concerns about the app,” Federal Bureau of Investigation Director Christopher Wray said at the University of Michigan on Friday. He cited the possibility the Chinese government could use it to collect data on U.S. users, or manipulate its recommendation algorithm to serve up propaganda or influence users more broadly. It could also be used to access other software on users’ devices and compromise them, he said.

Any deal the Biden administration reaches with TikTok is likely to be subject to approval in Beijing, which doesn’t want U.S. companies to have access to TikTok’s secret algorithm and other intellectual property that made the app so popular. ByteDance officials haven’t consulted the Chinese government about a potential deal with the U.S. while negotiations are ongoing, according to people familiar with the matter.

Republican lawmakers have been stepping up their rhetoric on TikTok, and are preparing to introduce legislation to ban the app in the U.S., a move that would likely be on more solid legal footing than the mechanism Mr. Trump tried to use. They have vowed to conduct rigorous oversight of the Biden administration’s actions, raising the political stakes for the White House.

Reps. James Comer (R., Ky.) and Cathy McMorris Rodgers (R., Wash.), two influential incoming committee chairs, launched an investigation into TikTok over the summer. In November, Rep. Mike Gallagher (R., Wis.) and Sen. Marco Rubio (R., Fla.) said they would propose legislation to ban the use of TikTok in the U.S. Mr. Rubio criticized Mr. Biden for continuing to work with TikTok influencers and the platform.

Mr. Gallagher’s aides said the national-security risks trump the entertainment and income that Americans gain from TikTok. The aides said social-media apps in general rise and fall in popularity quickly, and that Americans can easily find an alternative to TikTok.

Some congressional Democrats have also expressed worry about TikTok. Sen. Mark Warner (D., Va.) shares concerns about potential influence operations, said his spokeswoman, Rachel Cohen. “I think the Justice Department is trying to come up with a solution. I’m going to take a look at a solution, but they’ve got a huge mountain to climb,” Mr. Warner said on Fox News last month.

TikTok is owned by Beijing-based ByteDance, which has spent around $9 million lobbying in Washington over the past two years.

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