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Sources: US Opens National Security Probe of TikTokOwner's Acquisition

Reuters

   NEW YORK / BEIJING / WASHINGTON - The U.S. government has launched a
   national security review ofTikTokowner BeijingByteDanceTechnology Co.'s
   $1 billion acquisitionof U.S. social media app Musical.ly, according to
   two people familiar with the matter.
   While the $1 billion acquisition was completed two years ago, U.S.
   lawmakers have been calling in recent weeks for a national security
   probe intoTikTok, concerned the Chinesecompany may be censoring
   politically sensitivecontent, andraising questions about how it stores
   personal data.
   TikTokhas been growing more popular among U.S. teenagers at a time of
   growing tensions between the United States and China over trade and
   technology transfers. About 60% ofTikTok's26.5 million monthly active
   users in the United States are between the ages of 16 and 24, the
   company said earlier this year.
   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.lydeal, the sources
   said.TikTokdid not seek clearance from CFIUS when it acquired
   Musical.ly, they added, which gives the U.S. security panel scope to
   investigate it now.

   CFIUS, TikTok confer

   CFIUS is in talks withTikTokabout measures it could take to avoid
   divesting the Musical.ly assets it acquired, the sources said. Details
   of those talks, referred to by CFIUS asmitigation, could not be
   learned. The specific concerns that CFIUS has could also not be
   learned.
   The sources requested anonymity because CFIUS reviews are confidential.
   "While we cannot comment on ongoing regulatory processes,TikTokhas made
   clear that we have no higher priority than earning the trust of users
   and regulators in the U.S. Part ofthat effort includes working with
   Congress and we are committed to doing so," aTikTokspokesperson said.

   ByteDancedid not immediately reply to a request for comment.
   The U.S. Treasury Department, which chairs CFIUS, did not immediately
   respond to a request for comment.

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