By Echo Wang, Alexandra Alper and David Shepardson
NEW YORK, July 31 (Reuters) - The United States is preparing to take action against China's ByteDance over concerns that the company's ownership of the video app TikTok jeopardizes personal data, according to people familiar with the matter.
The move would force ByteDance to separate from TikTok, the sources said. It would represent a major blow for the Beijing-based company, which became one of only a handful of truly global Chinese conglomerates thanks to TikTok's commercial success.
It was not immediately clear whether the U.S. government would ask ByteDance to shed TikTok outright or make other changes to its ownership. However, an announcement could come as early as Friday, the sources said, requesting anonymity because the matter is confidential.
ByteDance and the U.S. Treasury Department, which chairs the government panel that has been reviewing ByteDance's ownership of TikTok, declined to comment.
Treasury Secretary Steve Mnuchin said on Wednesday that TikTok was under a national security review by the Committee on Foreign Investment in the United States and that he would be making a recommendation to President Donald Trump this week.
As relations between the United States and China deteriorate over trade, Hong Kong’s autonomy, cyber security and the spread of the novel coronavirus, TikTok has emerged as a flashpoint in the dispute between the world’s two largest economies.
Last week, the U.S. Senate Committee on Homeland Security and Governmental Affairs unanimously passed a bill that would bar U.S. federal employees from using TikTok on government-issued devices. It will be taken up by the full Senate for a vote. The House of Representatives has already voted for a similar measure.
ByteDance acquired Shanghai-based video app Musical.ly app in a $1 billion deal in 2017 and relaunched it as TikTok the following year.
(Reporting by Echo Wang in New York and Alexandra Alper and David Shepardson in Washington, D.C.; Editing by Diane Craft and Aurora Ellis)
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