Canada orders TikTok’s Canadian business to be dissolved but will not block app

Canada announced on Wednesday it will not block access to the popular video-sharing app TikTok but is ordering the dissolution of its Canadian business after a national security review of the Chinese company behind it.

Industry minister François-Philippe Champagne said it is meant to address risks related to ByteDance Ltd’s establishment of TikTok Technology Canada Inc.

“The government is not blocking Canadians’ access to the TikTok application or their ability to create content. The decision to use a social media application or platform is a personal choice,” Mr Champagne said.

He said it is important for Canadians to adopt good cybersecurity practices, including protecting their personal information.

Mr Champagne said the dissolution order was made in accordance with the Investment Canada Act, which allows for the review of foreign investments that may harm Canada’s national security.

He said the decision was based on information and evidence collected over the course of the review and on the advice of Canada’s security and intelligence community and other government partners.

A TikTok spokesperson said in a statement that the shutdown of its Canadian offices will mean the loss of hundreds of local jobs.

“We will challenge this order in court,” the spokesperson said. “The TikTok platform will remain available for creators to find an audience, explore new interests and for businesses to thrive.”

TikTok is wildly popular with young people, but its Chinese ownership has raised fears that Beijing could use it to collect data on Western users or push pro-China narratives and misinformation.

TikTok is owned by ByteDance, a Chinese company that moved its headquarters to Singapore in 2020.

TikTok faces intensifying scrutiny from Europe and America over security and data privacy. It comes as China and the West are locked in a wider tug of war over technology ranging from spy balloons to computer chips.

Canada previously banned TikTok from all government-issued mobile devices. TikTok has two offices in Canada, one in Toronto and one in Vancouver.

Michael Geist, Canada research chair in Internet and E-commerce Law at the University of Ottawa, said in a blog post that “banning the company rather than the app may actually make matters worse since the risks associated with the app will remain but the ability to hold the company accountable will be weakened”.

Canada’s move comes a day after the election in the United States of Donald Trump. In June, Mr Trump joined TikTok, a platform he once tried to ban while in the White House. It has about 170 million users in the US.

Mr Trump tried to ban TikTok through an executive order that said “the spread in the United States of mobile applications developed and owned” by Chinese companies was a national security threat. The courts blocked the action after TikTok sued.

Both the US FBI and the Federal Communications Commission have warned that ByteDance could share user data such as browsing history, location and biometric identifiers with China’s government. TikTok said it has never done that and would not, if asked.

Mr Trump said earlier this year that he still believes TikTok posed a national security risk, but was opposed to banning it.

US President Joe Biden signed legislation in April that would force ByteDance to sell the app to a US company within a year or face a national ban.

It is not clear whether that law will survive a legal challenge filed by TikTok or that ByteDance would agree to sell.