A U.S. court was asked on Thursday by TikTok and its Chinese parent company ByteDance to overturn a rule that they claim would prohibit the widely used short app in the country on January 19. They cited the U.S. government's refusal to hold meaningful settlement negotiations after 2022.
President Joe Biden signed legislation in April that gives ByteDance until January 19 of the next year to sell up its U.S. assets from TikTok or risk having the 170 million users of the app banned. A divestment, according to ByteDance, is "not possible technologically, commercially, or legally."
On September 16, the U.S. Court of Appeals for the District of Columbia will hear oral arguments in relation to complaints that ByteDance and TikTok users filed. The verdict in the case might have an effect on TikTok's future in the US and how the US government applies its newfound power to crack down on applications controlled by foreign companies.
ByteDance and TikTok argue in their request for the court to overturn the law that "this law is a radical departure from this country's tradition of championing an open Internet, and sets a dangerous precedent allowing the political branches to target a disfavored speech platform and force it to sell or be shut down."
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 says any divestiture or separation - even if technically possible - would take years and it argues that the law runs afoul of Americans' free speech rights.
Further, it says the law unfairly singles out TikTok for punitive treatment and "ignores many applications with substantial operations in China that collect large amounts of U.S. user data, as well as the many U.S. companies that develop software and employ engineers in China."
The legal battle intensified after several U.S. states passed laws aimed at restricting or outright banning the use of TikTok. The federal government has also been considering broader measures, citing the potential for the Chinese government to access user data and influence American users.
TikTok has consistently denied these allegations, arguing that it operates independently and implements robust data security measures. The company has taken steps to address these concerns, including relocating data storage for U.S. users to domestic servers and proposing a partnership with Oracle to manage user data.
Despite these efforts, the pressure has continued to mount. In response, TikTok has sought legal recourse, arguing that the proposed bans are unconstitutional and represent an overreach of government authority. The company has filed several lawsuits challenging the bans, asserting that they violate the First Amendment rights of both TikTok and its users.
Legal experts suggest that the outcome of these cases could set significant precedents for how technology companies are regulated and the extent to which governments can control digital platforms. TikTok's argument hinges on the notion that the bans are not based on concrete evidence of wrongdoing but rather on speculative risks.
ByteDance recounted lengthy negotiations between the company and the U.S. government that it says abruptly ended in August 2022. The company also made public a redacted version of a 100-plus page draft national security agreement to protect U.S. TikTok user data and says it has spent more than $2 billion on the effort.
The draft agreement included giving the U.S. government a "kill switch" to suspend TikTok in the United States at the government’s sole discretion if the company did not comply with the agreement and says the U.S. demanded that TikTok's source code be moved out of China.
"This administration has determined that it prefers to try to shut down TikTok in the United States and eliminate a platform of speech for 170 million Americans, rather than continue to work on a practical, feasible, and effective solution to protect U.S. users through an enforceable agreement with the U.S. government," TikTok lawyers wrote the Justice Department in an April 1 email made public on Thursday.
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 (0700.HK), opens new tab in the United States.
The White House says it wants to see Chinese-based ownership ended on national security grounds, but not a ban on TikTok. Earlier this month, Trump joined TikTok and has recently raised concerns about a potential ban.
The law prohibits app stores like those of Apple (AAPL.O), opens new tab and Alphabet's (GOOGL.O), opens new tab Google from offering TikTok. It also bars internet hosting services from supporting TikTok unless it is divested by ByteDance.
The situation remains fluid, with the potential for further developments as courts hear the cases and issue rulings. For now, TikTok users in the U.S. face uncertainty about the app's future availability, and the company continues to advocate for a legal solution to prevent the ban from taking effect.
As this legal battle unfolds, the broader implications for U.S.-China relations and the regulation of international tech companies are being closely watched by industry experts and policymakers worldwide.