Social media app is owned by Chinese firm ByteDance but says it does not operate in China

TikTok is reportedly being investigated as a potential national security risk by the US government, as the company’s 2018 acquisition of American social media app Musical.ly comes under retroactive scrutiny.

The Committee on Foreign Investment in the United States (CFIUS), which has the ability to scrutinise acquisitions and investments by foreign companies, never formally approved the buyout, since TikTok, which is owned by Chinese startup ByteDance, did not explicitly request clearance.

Reuters, citing two sources, says that CFIUS has opened an investigation, which could potentially result in ByteDance having to unwind the merger or spin off TikTok entirely.

“While we cannot comment on ongoing regulatory processes, TikTok has made clear that we have no higher priority than earning the trust of users and regulators in the US. Part of that effort includes working with Congress and we are committed to doing so,” TikTok told Reuters.

It is not the first time CFIUS has intervened in a social media buyout. In March, the committee pushed Kunlun Tech, a Chinese conglomerate, to sell dating app Grindr after deciding that the foreign ownership constituted a security risk.

TikTok, which allows its primarily teenage users to film and share short video clips, frequently set to music, has come under increasing scrutiny for its Chinese links over the past six months. The company is formally based in the US, and says that it stores all its user data there, with backups in Singapore. “Our data centres are located entirely outside of China, and none of our data is subject to Chinese law,” it added, in a statement published last month.

But the company has also been criticised for exporting Chinese censorship overseas. In September, the Guardian revealed that the company’s moderation guidelines, in use until May this year, explicitly instructed moderators to hide content that referred to Tiananmen Square, Falun Gong, or Taiwan’s independence. TikTok says its new guidelines are written locally. “Let us be very clear: TikTok does not remove content based on sensitivities related to China,” the company said last month.

“We have never been asked by the Chinese government to remove any content and we would not do so if asked. Period. We are not influenced by any foreign government, including the Chinese government; TikTok does not operate in China, nor do we have any intention of doing so in the future.” Within China, ByteDance operates a sister app, Douyin, which shares many features with TikTok.