Yellen Says TikTok-Like Data Security Risks Are Growing More Common

Alex Barinka, Bloomberg News

Janet Yellen, US Treasury secretary, speaks during a House Appropriations Subcommittee hearing in Washington, DC, US, on Thursday, March 23, 2023. The Treasury secretary said that regulators would be prepared for further steps to protect deposits if warranted, in new language that differs from her prepared remarks to the Senate a day earlier. , Bloomberg

(Bloomberg) -- Treasury Secretary Janet Yellen, who oversees an interagency task force that’s reviewing national security concerns around TikTok Inc., said she’s seeing a growing number of situations that have raised concerns similar to those prompted by the app.

“When it comes to data, we’re seeing an increasing number of cases that do present risks around this issue, of the type that have been mentioned in connection with TikTok,” she said Thursday during an appearance before a subcommittee of the House Appropriations Committee.

The Committee on Foreign Investment in the United States, which is led by the Treasury Department, has been looking into concerns about the app and its ownership by Chinese technology giant ByteDance Ltd. Review by the panel, also known as Cfius, has been going on for years, prompting frustration from US lawmakers who see the app as a risk and have proposed legislation that could limit TikTok in the US.

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In response to questions from Representative Ashley Hinson, an Iowa Republican, Yellen said the scrutiny of TikTok has dragged on because of litigation that hasn’t been resolved.

ByteDance acquired Musical.ly, which had a US presence, in late 2017, later merging it with its TikTok platform, thus kicking off the long saga surrounding the app.

“Cfius looks very carefully at these transactions and will not clear a transaction if there are national security concerns,” Yellen said.

While Yellen declined to talk about the details, she said Cfius could impose requirements that a company be structured in the US to address concerns about national security.

She was testifying hours after TikTok Chief Executive Officer Shou Chew was grilled by before another House panel.

--With assistance from Daniel Flatley.