TikTok sues to block US law seeking sale or ban of app
TikTok and
its Chinese parent company ByteDance sued in U.S. federal court on Tuesday
seeking to block a law signed by President Joe Biden that would force the
divestiture of the short video app used by 170 million Americans or ban it.
The companies filed their lawsuit in the U.S. Court of Appeals for the District of Columbia Circuit, arguing that the law violates the U.S. Constitution on a number of grounds including running afoul of First Amendment free speech protections.
The law, signed by Biden on April 24, gives ByteDance until Jan.
19 to sell TikTok or face a ban.
"For
the first time in history, Congress has enacted a law that subjects a single,
named speech platform to a permanent, nationwide ban," the companies said
in the lawsuit.
The lawsuit
said the divestiture "is simply not possible: not commercially, not
technologically, not legally. ... There is no question: the Act (law) will
force a shutdown of TikTok by January 19, 2025, silencing the 170 million
Americans who use the platform to communicate in ways that cannot be replicated
elsewhere."
The White
House has said it wants to see Chinese-based ownership ended on national
security grounds but not a ban on TikTok. The White House and Justice
Department declined to comment on the lawsuit.
The lawsuit
is the latest move by TikTok to keep ahead of efforts to shut it down in the
United States as companies such as Snap and Meta look
to capitalize on TikTok's political uncertainty to take away advertising
dollars from their rival.
Driven by
worries among U.S. lawmakers that China could access data on Americans or spy
on them with the app, the measure was passed overwhelmingly in Congress just
weeks after being introduced. TikTok has denied that it has or ever would share
U.S. user data, accusing American lawmakers in the lawsuit of advancing
"speculative" concerns.
Representative
Raja Krishnamoorthi, a top Democrat on a House committee on China, said the
legislation is "the only way to address the national security threat posed
by ByteDance’s ownership of apps like TikTok."
"Instead
of continuing its deceptive tactics, it’s time for ByteDance to start the
divestment process," he said.
The law
prohibits app stores like Apple and Alphabet's Google from offering TikTok and bars internet hosting
services from supporting TikTok unless ByteDance divests TikTok by Jan. 19.
The suit said the Chinese government "has made clear
that it would not permit a divestment of the recommendation engine that is a
key to the success of TikTok in the United States." The companies asked
the D.C. Circuit to block U.S. Attorney General Merrick Garland from enforcing
the law and said "prospective injunctive relief" is warranted.
According to the suit, 58% of ByteDance is owned by global
institutional investors including BlackRock, General Atlantic and Susquehanna
International Group, 21% owned by the company's Chinese founder and 21% owned
by employees - including about 7,000 Americans.
The four-year battle over TikTok is a significant front in
the ongoing conflict over the internet and technology between the United States
and China. In April, Apple said China had ordered it to remove Meta Platforms' WhatsApp and Threads from its App Store in China over
Chinese national security concerns.
TikTok has spent $2 billion to implement measures to protect
the data of U.S. users and made additional commitments in a 90-page draft
National Security Agreement developed through negotiations with the Committee
on Foreign Investment in the United States (CFIUS), according to the lawsuit.
That pact included TikTok agreeing to a "shut-down
option" that would give the U.S. government the authority to suspend
TikTok in the United States if it violates some obligations, according to the
suit.
In August 2022, according to the lawsuit, CFIUS stopped
engaging in meaningful discussions about the agreement, and in March 2023 CFIUS
"insisted that ByteDance would be required to divest the U.S. TikTok
business." CFIUS is an interagency committee, chaired by the U.S. Treasury
Department, that reviews foreign investments in American businesses and real
estate that implicate national security concerns.
In 2020, then-President Donald Trump was blocked by the
courts in his bid to ban TikTok and Chinese-owned WeChat, a unit of Tencent, in the United States. Trump, the Republican candidate
challenging the Democrat Biden in the Nov. 5 U.S. election, has since reversed
course, saying he does not support a ban but that security concerns need to be
addressed.
Biden could extend the Jan. 19 deadline by three months if
he determines ByteDance is making progress. The suit said the fact that Biden's
presidential campaign continues to use TikTok "undermines the claim that
the platform poses an actual threat to Americans." Trump's campaign does
not use TikTok.
Many experts have questioned whether any potential buyer
possesses the financial resources to buy TikTok and if China and U.S.
government agencies would approve a sale.
To move the TikTok source code to the United States
"would take years for an entirely new set of engineers to gain sufficient
familiarity," according to the lawsuit.
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