China – The state of TikTok had reached a stalemate after its CEO testified before Congress, who were skeptical about his intention with US user data.
His appearance on Thursday led to lawmakers grilling him about the company’s attempts to protect user data and put out fire regarding its ties to China.
Meanwhile, China has remained adamant that it would oppose a forced sale of TikTok – its first direct response to the Biden administration’s demands.
They had previously requested TikTok’s Chinese owners to sell their share of the company; otherwise, they would get banned in its most important market.
China’s comments follow Shou Chew, the CEO of TikTok, appearing before the court amid increasing scrutiny over the company’s connections in Beijing.
On Thursday, China’s commerce ministry stated that the forced sale of TikTok would be detrimental, damaging global investors’ confidence, especially in the United States.
“If the news [about a forced sale] is true, China will firmly oppose it,” said Shu Jueting, a ministry spokeswoman.
She also said a potential deal would have to seek the approval of the Chinese government.
“The sale or divestiture of TikTok involves technology export, and administrative licensing procedures must be performed in accordance with the Chinese laws and regulations,” Shu continued.
“The Chinese government will make a decision in accordance with the law.”
China previously didn’t weigh in directly on a possible force sale.
However, since 2020, it indicated that it wanted to protect Chinese technology by implementing recommendation algorithms to a list of restricted technologies for export.
The Thursday hearing with Shou Chew lasted more than five hours.
It started with a lawmaker’s urge to ban the app, and they stayed combative throughout the hearing.
“Your platform should be banned,” said Washington Republican Rep. Cathy McMorris Rodgers, whose words started the hearing.
Chew’s testimony emphasized TikTok’s independence from China, highlighting its ties to the United States.
“TikTok itself is not available in mainland China,” he said in his opening remarks.
“We’re headquartered in Los Angeles and Singapore, and we have 7,000 employees in the US today.”
“Still we have heard important concerns about the potential for unwanted foreign access to US data and potential manipulation of the TikTok US ecosystem.”
“Our approach has never been to dismiss or trivialize any of those concerns. We have addressed them with real action.”
While it is true that TikTok operates out of China, the Chinese government still has significant leverage over businesses under its jurisdiction.
There is speculation that ByteDance and TikTok could be forced to cooperate with a series of security activities, possibly including TikTok data transference.
During the Thursday hearing, Chew attempted to provide nuanced answers and assuage concerns about the company and ByteDance.
However, he was frequently interrupted as lawmakers called him evasive.
After the hearing
Following more than five hours of testimony, lawmakers expressed skepticism about TikTok’s attempts to protect user data and ease concerns about its ties to China.
According to analysts, there would likely be more calls by Washington seeking to ban TikTok if the company doesn’t separate itself from its Chinese parent.
Last December, Chinese officials proposed tightening measures to govern the sale of content-based recommendation algorithms to prospective foreign buyers.
The algorithm is a powerful tool that keeps users glued to the app.
It is also speculated to be responsible for TikTok’s success.
The algorithms recommend users new videos based on their behavior, usually pushing videos they like.
Chinese regulators initially added algorithms to the list of restricted technologies in August 2020.
Back then, the Trump administration threatened the company that it would be banned unless it was sold.
According to analysts and experts, Beijing might prefer that TikTok exit the US market instead of giving up its algorithm.