Deadline passes for ByteDance to restructure TikTok

A deadline for ByteDance to restructure TikTok’s operations has passed without a deal, as the Chinese company remains in advanced negotiations about the short video app’s status in the US.

The Committee on Foreign Investment in the US, which is reviewing ByteDance’s ownership of TikTok, had not approved a deal by the deadline on Friday, according to two people briefed on the matter. They said Cfius would not grant an extension, after already delaying the deadline twice in recent weeks.

The people added that Cfius was not expected to take any immediate action against ByteDance, as the parties remained in advanced talks about a deal.

ByteDance declined to comment. The US Treasury department, which chairs Cfius, said the committee was “engaging with ByteDance to complete the divestment and other steps necessary to resolve the national security risks arising from the transaction”.

The developments, which were first reported by Reuters, added to the uncertainty surrounding TikTok, as ByteDance works to secure a deal guaranteeing the popular app’s future in the US.

Under an executive order signed by President Donald Trump, Cfius could force ByteDance to sell TikTok’s US operations if the committee had not signed off on a deal by its deadline.

ByteDance has been working for more than a year to satisfy concerns raised by Cfius, an inter-agency body that reviews transactions with foreign investors on national security concerns. The committee’s investigation centred on ByteDance’s acquisition of the short video app, a deal that spurred the growth of TikTok.

The Trump administration alleges TikTok could share American user data with the Chinese government, a claim ByteDance has denied.

In November ByteDance asked that a court review Mr Trump’s executive order forcing the divestment of TikTok in the US. Separately, a federal judge in Pennsylvania has temporarily blocked commerce department rules that would have effectively banned the app in the US last month.

ByteDance said in a legal filing last month it had proposed restructuring TikTok’s US operations as a new entity wholly owned by Oracle, the Silicon Valley tech group, the retailer Walmart and the Chinese group’s US investors. The details of ByteDance’s most recent proposal could not be learned.

Additional reporting by Demetri Sevastopulo in Washington

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