President Donald Trump plans to announce a decision ordering China’s ByteDance Ltd. to divest its ownership of the popular US-based music-video app TikTok, according to people familiar with the matter.
The US has been investigating potential national security risks due to the company’s control of the app.
Snap, a TikTok competitor, gained on the report, reflecting speculation that it may benefit from any move that weakens TikTok. Shares of the Santa Monica, California-based company were up 2% in New York.
Bytedance bought Musical.ly in 2017 and merged it with TikTok, creating a popular and fast-growing social media hit in the U.S - the first Chinese app to make such inroads.
As TikTok grew more popular, US officials grew more concerned about the potential for the Chinese government to use the app to gain data on US citizens.
The Committee on Foreign Investment in the US, which investigates overseas acquisition of US businesses, began a review of the purchase in the fall of 2019, according to a person familiar with the investigation.
TikTok has become a political pawn between the US and China, and elected officials have criticized the app’s security and privacy practices, suggesting that user data collected through the app might be shared with the Chinese government.
President Trump said earlier this month he was considering banning TikTok as a way to retaliate against China for its handling of the coronavirus.