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December 18, 2020

Protocol

Over the last year, TikTok’s leaders have sworn in court that they do not share any U.S. user data with China, where their parent company, ByteDance, is based. However, the same can’t be said for several other ByteDance apps, which also have a sizable audience in the United States and abroad.

Over the last several months, TikTok has been winning case after case against the Trump administration’s attempts to ban the app under the guise of a national security emergency. While TikTok has spun off its own servers for U.S. users, ByteDance seemingly has taken no such precautions with its other apps.

Shannon Reaves, special counsel in Stroock’s National Security / CFIUS / Compliance Group, noted that while ByteDance’s acquisition of the app that predated TikTok, called Musical.ly, was the subject of an investigation by the Committee on Foreign Investment in the United States, two of their other homegrown Chinese apps that just happen to have U.S. users, places them outside of the purview of CFIUS. 

“The establishment of that entity and its operation is not subject to CFIUS review,” Reaves said, adding, “[CFIUS] could certainly look at that to inform their views about the TikTok acquisition and what they think might happen with the data from TikTok.”

Read the full article on Protocol.

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