TikTok Seen Moving Toward U.S. Security Deal, but Hurdles Remain

The Biden administration and TikTok have drafted a preliminary agreement to resolve national security concerns posed by the Chinese-owned video app but face hurdles over the terms, as the platform negotiates to keep operating in the US without major changes to its ownership structure.

The two sides havehed out the foundations of a deal in which TikTok would make changes to its data security and governance without requiring its owner, the Chinese internet giant ByteDance, to sell it.

The two sides are trying to work out a deal. Two people with knowledge of the matter say that Lisa Monaco, TikTok's No. 2 official, is concerned that the terms are not tough enough for China. Two people with knowledge of the matter say that the Treasury Department is skeptical that the potential agreement with TikTok can resolve national security issues. Changes to the terms could drag out a final resolution for a long time.

TikTok, one of the world's most popular social media apps, has been under a legal cloud in the US for more than two years due to its Chinese ties. The ability to protect the data of American users from Chinese authorities has been raised many times. The president threatened to block the app if ByteDance didn't sell TikTok to an American company.

TikTok has become a symbol of the Cold War atmosphere in relations between Beijing and Washington if an agreement with the Biden administration is finalized. The nations are competing for supremacy in technology and data. There is skepticism toward China in U.S. politics and the talks are taking place just weeks before the elections.

At a tricky time for the Biden administration, it may be difficult to complete an agreement. The policy toward Beijing is similar to that of the Trump White House, reflecting a suspicion of China that now spans the political spectrum The administration was criticized for being too soft on China.

"Anything short of a complete separation of TikTok from ByteDance will likely leave significant national security issues unresolved," said Senator Marco Rubio of Florida.

The Committee on Foreign Investment in the United States, or CFIUS, is a group of federal agencies that review investments by foreign entities in American companies to make sure they don't put national security at risk. The group would have to sign off on the agreement.

The committee is committed to taking all necessary actions to safeguard U.S. national security, according to a spokesman for the Treasury Department.

TikTok said it was confident that it was on a path to fully satisfy US national security concerns.

Image

At a Senate hearing about social media and national security this month, TikTok's chief operating officer declined to commit to cutting employees in China off from the app's American data but said any agreement with the government wouldatisfy all national security

A Justice Department spokeswoman and a White House spokeswoman both refused to speak. ByteDance did not reply.

There have been disagreements over TikTok for a long time. The Chinese company appeared to reach an agreement to sell part of TikTok to the American cloud computing company. A federal court ruled against Mr. Trump when he tried to block the app.

Mr. Biden had the final say on TikTok. He rolled back Mr. Trump's demand that TikTok be stopped. The app and others are owned by foreign entities.

The Biden administration's plans for TikTok were thrust back into the spotlight in June when it was reported that the company's employees in China had access to the U.S. data.

Negotiating with TikTok has dragged on as officials wrap their arms around complex technical questions. Two people with knowledge of the discussions say that they are close to a detailed agreement.

The people with knowledge of the discussions said that there would be changes to three areas.

Two of the people said that TikTok would store its American data on a server in the US, instead of on its own server in Singapore and Virginia. In response to concerns that the Chinese government could use its feed as a way to influence the American public, oracle is expected to monitor TikTok's powerful algorithm that determine the content that the app recommends. Three people with knowledge said that TikTok would have a board of security experts that would report to the government.

According to reports, TikTok has a plan to store its data with oracle.

People familiar with the matter said that TikTok is represented by several law firms. Two people with knowledge of the talks say that a Justice Department national security lawyer is among the government officials negotiating a deal.

Another person said that Oracle was consulted by the government. The company didn't want to comment.

Image

Four people with knowledge of the matter said that Ms. Monaco is reviewing the terms of the draft deal. The people said that Ms. Monaco has a reputation for taking a hard line on Beijing.

The way the Biden administration handles China is different. Treasury Secretary Janet L. Yellen has called for a reduction in U.S. tariffs on Chinese imports because of the burden they place on companies and consumers. Jake Sullivan, the national security adviser, has called for a closer look at commercial ties with China.

President Biden doesn't seem to be able to decide which side of his administration he wants to support.

Mr. Biden ordered the Committee on Foreign Investment in the US to consider whether deals would expose data from the US to foreign adversaries.

A person with knowledge of the matter says the White House is working on two other executive orders to address concerns about China. Concerns that American investors were putting money into Chinese firms would be addressed by one. The amount of money spent by US companies on deals in China so far this year is less than last year.

The second executive order could allow the government to take on apps that could leak data to a foreign power.

Antonia Tzinova, a partner at the law firm Holland & Knight who specializes in national security, said that any resolution on TikTok would likely be a template for similar cases in the future. Big Data, or data generally, is of particular concern as China is seen as a threat.

Noyes was a researcher.