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Months before the U.S. government demanded ByteDance divest from TikTok, the Department Of Justice’s Criminal Division subpoenaed the app’s Chinese parent company, according to a source.
The FBI and the Department of Justice are investigating the events that led TikTok’s Chinese parent company, ByteDance, to use the app to surveil American journalists, including this reporter, according to sources familiar with the departments’ actions.
According to a source in position to know, the DOJ Criminal Division, Fraud Section, working alongside the Office of the U.S. Attorney for the Eastern District of Virginia, has subpoenaed information from ByteDance regarding efforts by its employees to access U.S. journalists’ location information or other private user data using the TikTok app. According to two sources, the FBI has been conducting interviews related to the surveillance. ByteDance’s use of the app to surveil U.S. citizens was first reported by Forbes in October, and confirmed by an internal company investigation in December.
“We have strongly condemned the actions of the individuals found to have been involved, and they are no longer employed at ByteDance. Our internal investigation is still ongoing, and we will cooperate with any official investigations when brought to us,” said ByteDance spokesperson Jennifer Banks. TikTok did not respond to a request for comment.
The Office of the U.S. Attorney for the Eastern District of Virginia and the DOJ did not immediately respond to requests for comment. The FBI declined to comment.
This is the first report of the federal government investigating ByteDance’s surveillance practices. It is not clear if the DOJ’s subpoena is connected to the FBI’s interviews.
The DOJ and the FBI are both part of the interagency Committee on Foreign Investment in the United States (CFIUS), which this week demanded that ByteDance divest from TikTok or face a nationwide ban of the app. For the past several years, CFIUS has attempted to negotiate a national security contract with TikTok meant to mitigate concerns that it could be used by the Chinese government to access valuable private information about U.S. citizens or manipulate U.S. civic discourse. (Disclosure: In a former life, I held policy positions at Facebook and Spotify.)
The divestiture demand marks a dramatic defeat for TikTok, which promised to spend $1.5 billion on a set of data sequestration plans, known as Project Texas, which it hoped would allow ByteDance to continue to own TikTok. Under Project Texas, TikTok would house U.S. user data in domestic servers managed by a U.S.-based team subject to government oversight. However, ByteDance’s confirmation that it surveilled journalists appeared to contradict the promises it had made to the U.S. government as part of the proposal.
The demand also comes amid heightened concern about TikTok on Capitol Hill. In December, a bipartisan coalition began pushing for a full ban of the app, and lawmakers expressed outrage at the companies’ surveillance of reporters. At the time, Congressman Raja Krishnamoorthi (D.-Illinois) told Forbes there was “genuine bipartisan concern” about TikTok, adding that “concern might be an understatement.” Last week, a group of 12 more senators introduced a bill that would make it easier for President Biden to enact a ban. The White House endorsed the bill, asking that Congress “act quickly” to pass it.
TikTok has said that neither divestment nor a ban would address the national security concerns raised by skeptics in Washington. Instead, it has urged CFIUS to accept a proposal, based on Project Texas, that would allow ByteDance to continue to own TikTok. But CFIUS’s divestment demand seems to suggest the proposal has failed to convince the government.
TikTok began working on Project Texas in 2021, as a response to concerns first raised under the Trump Administration. The project was kept under wraps until BuzzFeed News revealed its existence in early 2022, and it became the subject of regulatory inquiry after the same outlet received leaked audio demonstrating that U.S. TikTok user data had been repeatedly accessed by ByteDance employees in China.
Reporting from both BuzzFeed News and Forbes showed that there has been little-to-no functional separation between TikTok and ByteDance. A September 2022 report from Forbes revealed that TikTok leaders were often expected to follow direction from executives at ByteDance.
In July 2022, BuzzFeed News also reported that ByteDance pushed pro-China messaging to U.S. users of another (now-defunct) app. In December 2022, Forbes found that Chinese state media had used TikTok accounts (which, at the time, did not contain labels disclosing that they were run by state media) to attack certain politicians before the midterm elections. The same week, FBI Director Christopher Wray expressed concern that the Chinese government might use TikTok for influence operations.
In November, Forbes reported on an internal ByteDance fraud risk assessment from 2021, which warned: “Unless ByteDance makes substantial, sustained, and rapid investments in its anti-fraud programs,” the company could be subject to massive fines and lose the ability to operate in the United States. The assessment further warned of “criminal indictments of ByteDance executives and managers (even if they did not actively participate in misconduct).”