TikTok has stopped a hiring process for consultants that would help it reach a potential security agreement with the United States, according to two people with knowledge of the matter, as opposition to such a deal among U.S. officials mounts.
TikTok, a short-video app owned by Chinese technology conglomerate ByteDance, has been trying to convince Washington for the last three years that the personal data of U.S. citizens cannot be accessed and its content cannot be altered by China’s Communist Party or any other entity under Beijing’s influence.
President Joe Biden withdrew an executive order in 2021 by his predecessor Donald Trump to bar TikTok in the United States, but talks between his administration and the social media company have carried on over a potential deal that would spare ByteDance from being pushed to divest TikTok.
As part of these talks, TikTok has been putting together a program to convince the U.S. government that it would abide by their security agreement.
The program entails hiring a source-code inspector, a third-party monitor, and three auditors, including one dedicated to cyber security and one to make sure that U.S. user data on existing TikTok servers will be wiped out following migration to Oracle Corp (ORCL.N), according to two people with knowledge of the matter.
These posts would be paid for by TikTok but report to U.S. government officials.
TikTok circulated requests for proposals for some of these positions early in December with an aim to submit potential candidates for approval to the Committee on Foreign Investment in the United States (CFIUS), the security panel that has been investigating ByteDance’s ownership of the popular social media app.
But in a blow to the deal, TikTok told the consultants vying for some of these roles late in December that the hiring process was on hold and that it would update them by the end of this month on whether it will resume, the sources said.
In its explanation to consultants for the move, TikTok mentioned “recent developments”, without elaborating, one of the sources said.
Its decision to stop hiring came after its admission last month that some of its employees improperly accessed TikTok user data of two journalists in an attempt to determine the source of information leaks to the media.
This revelation alarmed some U.S. officials who were backing a security deal with TikTok and strengthened the hand of China hawks in the U.S. government demanding Biden to order ByteDance to divest the app, according to people with knowledge of the deliberations.
It is still unclear when the U.S. government will reach a decision about the future of TikTok.
A spokeswoman for TikTok verified that the company had stopped the hiring process for third-party security vendors because CFIUS has not yet passed the security agreement. TikTok had expected it would have struck a deal with the U.S. government by now, the spokeswoman added.
The spokeswoman also said that TikTok was hiring “rapidly” for data security posts that do not need security approval.
“While some components of our plan are specific to US government oversight, we are continuing to move forward on security measures overall,” the spokeswoman said.
The White House and the Treasury Department, which chairs CFIUS, did not immediately reply to a request for comments.
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TikTok has already launched several measures aimed at placating the U.S. government, including an agreement for Oracle to store user data in the United States and a U.S. security division to be in charge of data protection and content moderation. It has spent $1.5 billion on hiring and restructuring to build that unit.
The headcount in the USDS division is expected to rise to 2,500 for roles including security, engineering, and trust and safety, more than twice the current levels, the spokeswoman said.
Chris Griner, a Stroock & Stroock & Lavan LLP security lawyer who is not taking part in the TikTok negotiations, said TikTok’s misuse of journalists’ data undermined prior guarantees to protect user information.
“We have done many reviews before CFIUS over decades – and trust is a critical component in successful reviews,” Griner told Reuters. “Once gone, it is exceedingly hard to get it back.”
U.S. lawmakers seeking to clamp down on China as part of a broader set of disputes over trade, human rights, and intellectual property have seized on the security concerns over TikTok to pressure the White House to take a hard line.
Biden passed a spending bill into law in December prohibiting federal employees — about 4 million — from using TikTok on government-issued devices, following similar bans by some states and local authorities.
TikTok CEO Shou Zi Chew will meet European Union antitrust chief Margrethe Vestager in Brussels next week to talk about issues such as the implementation of the EU’s Digital Services Act and the protection of personal data by online platforms.
