TikTok’s future is more uncertain than ever after the social media business sued the US government on Tuesday over a rule requiring Chinese parent ByteDance to sell the app or face a countrywide ban.
President Joe Biden signed legislation in April giving ByteDance nine months to find a buyer for its popular short-form video platform, with a three-month extension if a transaction is in the works. The Protecting Americans From Foreign Adversary Controlled Applications Act has bipartisan approval in both chambers of Congress.
TikTok claims that the bill violates the First Amendment and that divestiture is “simply not possible: not commercially, technologically, or legally,” according to the company’s court filing.
“For the first time in history, Congress has enacted a law that subjects a single, named speech platform to a permanent, nationwide ban, and bars every American from participating in a unique online community with more than 1 billion people worldwide,” the complaint stated.
American politicians have long maintained that TikTok’s foreign ownership posed a national security concern. Former President Donald Trump attempted to prohibit the platform with an executive order in 2020, establishing the groundwork for a prospective ban. That initiative failed, but the issue gained traction as concerns grew about China’s increased influence over the global state.
TikTok spent more than $2 billion on a program named “Project Texas” to better protect user data in the United States from foreign interference before the law was passed. Nonetheless, lawmakers persisted in their efforts to pass legislation.
The outcome of TikTok’s action, filed in the United States Court of Appeals for the District of Columbia Circuit, is mainly determined by how the courts handle the case. Is it a First Amendment matter or a national security concern?
‘One of those very difficult topics’
According to Gus Hurwitz, senior fellow and academic director of the Center for Technology, Innovation, and Competition at the University of Pennsylvania Carey Law School, the D.C. Circuit Court may agree to hear the case in an expedited timeframe, which would result in a completed opinion being delivered before a sale is required.
Hurwitz stated that TikTok and ByteDance will most certainly seek a stay of the bill or a preliminary injunction from the court, thus putting the law on hold until a decision is made.
TikTok may also launch another lawsuit on behalf of its users, which Hurwitz believes would enhance the company’s First Amendment position and, if viewed through that perspective, make it more difficult for Congress to triumph.
“This is one of those truly hard issues on both sides sort of cases,” Hurwitz stated.
According to Gautam Hans, an associate clinical professor of law at Cornell Law School, courts take speech suppression issues seriously while simultaneously protecting national security. He stated that the two priorities rarely come into conflict.
“These situations are relatively rare,” Hans stated during an interview. “This law is, to my understanding, is pretty unprecedented.”
It’s also different from previous attempts to ban TikTok since the law has bipartisan backing, which can sway the courts, Hans added. Regardless of what occurs in the circuit court, Hans believes there is a strong likelihood that the case will be brought to the United States Supreme Court.
“I don’t think that this case is going to be easily resolved,” Hans responded.
It’s also different from previous attempts to ban TikTok since the law has bipartisan backing, which can sway the courts, Hans added. Regardless of what occurs in the circuit court, Hans believes there is a strong likelihood that the case will be brought to the United States Supreme Court.
“I don’t think that this case is going to be easily resolved,” Hans responded.
Weighing a sale
ByteDance might simplify the process by agreeing to divest TikTok so that its principal owner is located outside of China. However, the business has reportedly stated that it would rather close TikTok in the US than sell it. TikTok CEO Shou Chew stated in a video on the app, “Make no mistake: This is a ban.”
A prospective sale is further complicated by the question of TikTok’s algorithm, which is the fundamental piece of technology that allows the app to provide suggestions to users. China would likely have to allow the algorithm transfer, which analysts do not believe will happen.
“It’s kind of like you’re selling the house, but you take out all the windows and doors and who’s gonna buy it?” Hans stated.
Nonetheless, there are some interested buyers.
Former Treasury Secretary Steven Mnuchin told CNBC’s David Faber on Tuesday that he is “very interested” in buying or investing in TikTok. He claimed that even without the algorithm, the platform could be recreated within a year. However, he said it would be a lot more challenging deal if TikTok spent six months of that time suing.
“The best outcome would be if they’d agree to do a deal now and you’d have a year to rebuild the technology, which I think would be a major effort but could be done,” Mnuchin stated.
TikTok can currently continue to operate. Hurwitz stated that the corporation had little intention of selling or ceasing operations in the United States until the very last minute.
“This is going to take a while,” he remarked.
TikTok sued the U.S. government to block a ban. Here’s what happens now
