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TikTok, ByteDance sue to block US law seeking sale or ban of app By Reuters

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By David Shepardson

WASHINGTON (Reuters) -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 its use.

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 White House and U.S. Justice Department did not immediately respond to requests for comment.

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 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

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The law prohibits app stores 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 says “prospective injunctive relief” is warranted.

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.

Biden could extend the Jan. 19 deadline by three months if he determines ByteDance is making progress.

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.

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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.

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 (NASDAQ:) said China had ordered it to remove Meta Platforms (NASDAQ:)’ WhatsApp and Threads from its App Store in China over Chinese national security concerns.



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