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House lawmaker says US ByteDance investors should urge China to allow TikTok sale

Published 03/06/2024, 11:44 AM
Updated 03/06/2024, 01:11 PM
© Reuters. FILE PHOTO: U.S. flag and TikTok logo are seen in this illustration taken, June 2, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

By David Shepardson

WASHINGTON (Reuters) -A U.S. House Republican leading a legislative push to force China's ByteDance to divest TikTok in the United States or face a ban says American investors should urge China to allow a sale.

Representative Mike Gallagher, who chairs a House panel on China, introduced legislation on Tuesday with Representative Raja Krishnamoorthi, the panel's top Democrat, that would give ByteDance about six months to sell TikTok or face a ban citing national security concerns.

"It is in their interest to allow a separation," Gallagher said of the Chinese government.

The House Energy and Commerce Committee is set to vote on the bill on Thursday.

Reuters reported in 2020 that U.S. private equity firms Sequoia Capital and KKR & Co (NYSE:KKR) led a ByteDance funding round that was to value the TikTok owner at $180 billion, two people familiar with the matter said.

In 2021 Reuters reported that the company's board included investors General Atlantic, Sequoia Capital and Susquehanna International Group.

The companies did not immediately respond to requests for comments.

The bill would give ByteDance 165 days to divest TikTok, which is used by more than 170 million Americans, or it would be unlawful for app stores operated by Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL) and others to offer TikTok or to provide web hosting services to ByteDance-controlled applications.

The bill would not authorize any enforcement against individual users of an affected app.

TikTok has sharply criticized the bill that has 10 Democratic and 10 Republican co-sponsors.

© Reuters. FILE PHOTO: U.S. flag and TikTok logo are seen in this illustration taken, June 2, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

"This bill is an outright ban of TikTok, no matter how much the authors try to disguise it," a company spokesperson said Tuesday.

"This legislation will trample the First Amendment rights of 170 million Americans and deprive 5 million small businesses of a platform they rely on to grow and create jobs."

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