On Tuesday, TikTok as well as its Chinese parent organization ByteDance filed a lawsuit in a U.S. federal court, attempting to overturn a bill that President Joe Biden had signed that would have required the 170 million Americans who use the short video app to either divest or outright prohibit it.
The businesses sued in the United States Court of Hearings for the District of the District of Columbia, claiming that the statute is unconstitutional on several grounds, including violating the First Amendment’s guarantees of free speech. Biden signed the bill on April 24. ByteDance has until January 19 to list on TikTok or risk being banned.
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“In the lawsuit, the companies claimed that Congress had passed a law that permanently banned speech on a single platform, nationwide, for the initial time in history.”
The complaint asserts that the sale is unfeasible: neither commercially, technologically, nor legally viable. It is unequivocal that the Act will mandate a cessation of TikTok’s operations by January 19, 2025, effectively muting the voices of the 170 million Americans who utilize the platform for communication in a manner that is irreplaceable on any other medium.
According to the White House, a ban on TikTok is not what it wants; rather, it wants Chinese-based ownership to terminate for national security reasons. Regarding the complaint, the Justice Department and the White House remained silent.
The lawsuit is TikTok’s most recent attempt to fend off attempts to close it down across the US, as businesses like Snap (SNAP.N), starts new tab, and Meta try to take advantage of the political unpredictability of TikTok to steal advertising money from its rival.
Just a few weeks after it was announced, the legislation was enacted by Congress with overwhelming support, fueled by concerns expressed by American politicians that China may use the app to access American data or spy on them. In the complaint, TikTok has accused US legislators of pursuing “speculative” concerns and denies ever sharing user data from US citizens.
The leading Democrat on a House committee dealing with China, Representative Raja Krishnamoorthi, stated that the measure is “the only way to address the national security threat posed by ByteDance’s ownership of apps like TikTok.” “Rather than persisting with its deceptive strategies, ByteDance should commence the divestiture process,” he declared.
The regulation forbids internet hosting providers from supporting TikTok and forbids app shops like Apple (AAPL.O) and Google, owned by Alphabet, (GOOGL.O) from supplying TikTok even though ByteDance eliminates TikTok by January 19.
According to the lawsuit, the Chinese government has stated it will not allow the divestiture of TikTok’s recommendation engine, which is crucial to its success in the United States. The companies have asserted the need for “prospective injunctive relief” and have called upon the District of Columbia Circuit to restrain the U.S. Attorney General, Merrick Garland, from enforcing the law.
The lawsuit states that 58% of ByteDance is held by international institutional investors, such as General Atlantic, BlackRock, and Susquehanna International Group; 21% is owned by the Chinese founder of the firm, and 21% is owned by staff members, who include over 7,000 Americans.
Tensions around technology and the internet
The four-year dispute over TikTok represents a major battleground in the continuing tech and internet war between China and the United States. Apple said in April that it had received an order from China to remove Threads, WhatsApp, and the Meta Platforms (META.O) open tab from the Chinese App Store due to national security concerns.
The complaint states that TikTok has pledged additional measures in a 90-page draft National Security Agreement, which was formulated during discussions with the Committee on Foreign Investment in the United States (CFIUS). The company has also invested $2 billion in actions to safeguard the data of U.S. users.
The lawsuit states that as part of the agreement, TikTok agreed to a “shut-down option” which permits the American government to prohibit the app within the country if it violates any regulations.
The courts thwarted the efforts of the then-President Donald Trump in 2020 to outlaw TikTok and the Chinese-owned Tencent (0700.HK) subsidiary WeChat in the US. Since then, Trump—the Republican running against Democrat Joe Biden on November 5 in the US election—has changed his position, stating that while he does not want a ban, security issues must be taken into consideration.
Should Biden perceive progress from ByteDance, he might opt to prolong the deadline to January 19 by an additional three months. The lawsuit suggests that Biden’s presidential campaign’s ongoing use of TikTok contradicts the assertion that the platform is a genuine threat to Americans. Conversely, the Trump campaign does not utilize TikTok.
Numerous analysts have questioned if any possible buyer would have the funds to purchase TikTok and whether the governments of China and the United States would consent to the transaction.
The complaint asserts that “it would require years for a completely new team of engineers to become adequately acquainted” with the TikTok source code in order to relocate it to the United States.
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