TikTok: Why The CFIUS Review Process Has Taken As Long As It Has?

A reporter pressed White House Press Secretary Karine Jean-Pierre during a March 2023 briefing about why the Committee on Foreign Investment in the United States (CFIUS) review of TikTok has dragged on for years while the Chinese-owned app has grown to 150 million American users. Jean-Pierre declined to shed light on the timeline, saying only that CFIUS was conducting “an independent review” and she couldn’t speak to their process — even as TikTok CEO Shou Zi Chew prepared to testify before Congress the following day.

The 150 Million User Benchmark

• User base size: TikTok’s U.S. user base had grown to 150 million monthly active users.
• Growth trajectory: Growth continued despite ongoing government concerns.
• Strategic messaging: TikTok CEO prepared to emphasize user numbers in testimony.
• Economic impact: Creator economy supported millions of small businesses.
• Political implications: User base size created political complexity for any ban.

The Trump-Era Precedent

• First ban attempt: Former President Trump tried to ban TikTok over two years earlier.
• Executive order: Trump’s August 2020 executive order targeting TikTok.
• Court blocks: Federal courts blocked Trump’s original ban effort.
• Subsequent growth: App grew substantially after blocked ban attempt.
• Biden rescission: Biden rescinded Trump executive orders while continuing CFIUS review.

The CFIUS Review Timeline

• Multi-year review: CFIUS review had been ongoing for years.
• Project Texas: TikTok had proposed housing U.S. data with Oracle as solution.
• Negotiation complexity: Review involved complex technical and legal negotiations.
• Confidentiality: CFIUS deliberations remain statutorily confidential.
• Administration pressure: Reports suggested administration pushing for faster resolution.

Jean-Pierre’s Process Defense

• Independent review: Press secretary emphasized CFIUS’s independent review process.
• Can’t speak to process: Refused to discuss CFIUS timeline or methods.
• Consistent messaging: Maintained administration line on TikTok.
• Confidentiality citation: CFIUS confidentiality rules justified non-engagement.
• Process respect: Framed administration as respecting established process.

The Testimony Context

• Chew appearance: TikTok CEO Shou Zi Chew testified the following day.
• House Energy and Commerce: Testified before House Energy and Commerce Committee.
• Bipartisan questioning: Received aggressive questioning from both parties.
• Record coverage: Hearing received unprecedented media coverage.
• Public spectacle: Created high-profile public spectacle on TikTok debate.

The CFIUS Process

• Inter-agency review: CFIUS includes Treasury, Defense, State, Commerce, Justice.
• National security scope: Reviews focused on national security implications.
• Divestiture authority: Can require foreign owner divestiture of U.S. assets.
• Mitigation agreements: Can negotiate mitigation agreements rather than divestiture.
• Executive authority: President ultimately decides on CFIUS recommendations.

Project Texas Details

• Oracle partnership: TikTok partnered with Oracle to house U.S. user data.
• U.S. data isolation: Plan aimed to isolate U.S. data from ByteDance.
• Monitored access: Third-party monitoring of data access.
• Algorithmic transparency: Enhanced algorithmic transparency provisions.
• $1.5 billion investment: TikTok invested substantially in the effort.

Alternative Remedies

• Forced divestiture: Administration reportedly pushing for forced divestiture.
• Outright ban: Some members of Congress pushed for outright ban.
• Enhanced regulation: Enhanced regulation as alternative to ban.
• International coordination: Coordination with allies on TikTok approaches.
• Legal challenges: Any action likely to face substantial legal challenges.

The Political Dimension

• Bipartisan concern: Both parties unified on China/TikTok concerns.
• Youth demographics: Young voter demographics complicated political calculus.
• Democratic caution: Democrats cautious about alienating young voters.
• Republican pressure: Republicans more aggressive on TikTok ban.
• Election-year dynamics: 2024 election dynamics affected calculus.

The National Security Arguments

• Data security: Chinese law could compel ByteDance to share data.
• Algorithmic manipulation: Algorithm could be manipulated by Chinese government.
• Surveillance risks: App access to device could enable surveillance.
• Content suppression: Concerns about content moderation decisions.
• Influence operations: Platform could enable influence operations.

Industry Response

• Free speech concerns: First Amendment concerns about targeting specific platform.
• Competitive concerns: Competitors would benefit from TikTok restrictions.
• Creator economy: Small businesses dependent on TikTok algorithm.
• International implications: Action could affect U.S. tech companies abroad.
• Legal preparation: TikTok retained First Amendment litigation counsel.

Key Takeaways

• Jean-Pierre refused to explain why the CFIUS TikTok review has dragged on for years.
• The press secretary cited CFIUS’s independent process as justification for not commenting.
• TikTok’s U.S. user base had grown to 150 million during the lengthy review.
• Trump’s initial ban attempt over two years earlier had been blocked by courts.
• TikTok CEO Shou Zi Chew was scheduled to testify before Congress the following day.
• The administration reportedly pushed for forced divestiture while maintaining CFIUS review confidentiality.

Transcript Highlights

The following quotations are drawn from an AI-generated Whisper transcript of the briefing and should be considered unverified pending official transcript release.

• “We’re just not going to comment any further.” — Karine Jean-Pierre
• “I can’t speak to their process. It is, they are doing this independent review.” — Karine Jean-Pierre
• “The message from TikTok increasingly is focused on the number of users now of 150 million.” — Reporter framing
• “Is the app now so popular that it’s too late for these national security concerns to be properly addressed?” — Reporter question
• “The former president tried to ban TikTok more than two years ago, and the app has only grown in popularity since. What’s taking so long?” — Reporter question
• “The TikTok CEO is expecting to stress that in his testimony tomorrow.” — Reporter framing

Full transcript: 148 words transcribed via Whisper AI.