New US TikTok Entity Triggers Privacy Alarm Over Citizenship and Sexual Orientation Data

The new US-controlled TikTok entity's privacy terms have sparked concern among American users after disclosures in the updated policy suggested it may process highly sensitive personal information, including citizenship, immigration status and sexual orientation. TikTok USDS Joint Venture LLC, a majority American-owned company created to operate TikTok in the United States, updated its Terms of Service and Privacy Policy as part of a legal and structural transition that will determine whether the platform can continue serving more than 200 million American users.

Under California and other state privacy laws, companies must explicitly list categories of 'sensitive personal information' that may be collected or processed. TikTok's new policy, presented to users via mandatory in-app notices, includes among these categories 'sexual life or sexual orientation, status as transgender or non-binary and citizenship or immigration status.'

Ownership Shift and Policy Update

After years of political and legal clashes over national security and data privacy, TikTok's Chinese parent, ByteDance, finalised the sale of its US operations on Jan. 22, 2026, creating TikTok USDS Joint Venture LLC. The new entity is controlled by a consortium of investors, including Oracle, Silver Lake and MGX, each holding around 15% of the company, while ByteDance retains a 19.9% minority stake.

The transition was engineered to comply with the Protecting Americans from Foreign Adversary Controlled Applications Act, a 2024 federal law that required companies like TikTok to divest Chinese ownership before a set deadline or face a federal ban. In its announcement, TikTok USDS characterised the establishment of the venture as an opportunity to protect national security through 'comprehensive data protections, algorithm security, content moderation and software assurances' for US users.

The company said it will host and safeguard US user data in Oracle's secure US cloud environment with periodic third-party audits. The updated terms also reflect technical changes, such as the collection of precise geolocation and AI interaction metadata, as well as expanded use of data for advertising across the internet.

Sensitive Data Disclosure Sparks Concern

For many TikTok users, the specific language around sensitive personal data was unexpected and disturbing. In the updated privacy policy, users were informed the company might process details from 'information you disclose in survey responses or in your user content', including racial origin, religious beliefs, health information, sexual orientation and citizenship or immigration status.

These inclusions are driven partly by state privacy obligations such as California's Consumer Privacy Act and its amendments, which require explicit disclosure of sensitive personal information categories to users. Despite this legal framing, thousands of users took to other platforms and forums to voice concern, warning that agreeing to the terms effectively permits TikTok to handle intimate and potentially identifiable personal details.

Users have reported that the updated terms must be accepted before accessing the app, and some claimed they were effectively forced to agree if they wanted to continue using the service. Security and privacy experts say such disclosures are not unique to TikTok. Many major platforms list broad categories of personal data they may process to comply with similar state laws. However, TikTok's high profile and its recent structural overhaul have magnified public attention.

User Backlash and Broader Debate

Beyond policy and legal circles, thousands of ordinary users are reacting to the changes with alarm. Social media comment threads and online forums are filled with users discussing account deletions and potential privacy implications. Some users compared the new terms to general data surveillance, while others expressed distrust in corporate intentions behind data collection.

Commentators warn that even if TikTok's disclosures are mandated by law, the breadth of data categories listed could chill free expression and weigh heavily on marginalised groups if mishandled. They argue that transparency alone does not mitigate the risks inherent in collecting and storing sensitive personal information on a large scale.

The debate touches on a broader tension in digital governance: how to balance national security imperatives and user privacy protections in an era defined by ubiquitous data collection and algorithmically driven services.

TikTok's updated terms of service may keep the app alive in the US, but they have also raised urgent questions about how much users understand — and consent to — when they agree to ubiquitous digital platforms' privacy policies.