TikTok says it’s been waiting weeks for a Trump response on US ban
November 12, 2020
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TikTok headquarters in Culver City, California.
Enlarge / TikTok headquarters in Culver City, California.

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ByteDance on Tuesday appealed to a federal appellate court seeking to overturn a sweeping Trump administration order requiring the company to divest itself of its popular TikTok platform—at least in the United States. The order is scheduled to take effect tomorrow. But ByteDance says that it has been weeks since it has heard from the government’s Committee on Foreign Investment in the United States about ByteDance’s plan to address the government’s concerns without shutting TikTok down.

ByteDance has proposed selling a share of TikTok to Oracle and giving the company’s US division more autonomy. These changes were designed to address the government concerns that American TikTok users could be subjected to Chinese government surveillance or other meddling.

“For a year, TikTok has actively engaged with CFIUS in good faith to address its national security concerns, even as we disagree with its assessment,” TikTok said in a media statement. “In the nearly two months since the president gave his preliminary approval to our proposal to satisfy those concerns, we have offered detailed solutions to finalize that agreement—but have received no substantive feedback on our extensive data privacy and security framework.”

The August 14 order establishing tomorrow’s November 12 deadline allowed ByteDance to seek a further 30-day extension. ByteDance says it requested an extension but hasn’t received an answer. So it’s now asking the DC Circuit Court of Appeals to rule on the issue.

Trump has actually issued two different orders purporting to ban TikTok—one on August 6 and the other on August 14. The orders haven’t fared well in court so far. A federal judge blocked enforcement of the first order in September. Last month, a Pennsylvania federal judge blocked the enforcement of the second order in response to a lawsuit brought by several TikTok users.

TikTok’s own challenge to the August 14 order is ongoing before a trial judge in DC, but TikTok is now seeking to escalate its challenge to the appellate court level.

ByteDance’s legal arguments

ByteDance argues that Trump’s divestiture order exceeds the president’s authority to review mergers involving foreign companies. In 2017, ByteDance acquired a video-sharing company called Musical.ly and rebranded it as TikTok. President Trump argues that he has the power to retroactively block the Musical.ly acquisition and thereby force ByteDance to spin off or shut down all of TikTok’s US operations.

But ByteDance argues the government is overstating Musical.ly’s role in TikTok’s creation. ByteDance says it launched TikTok before acquiring Musical.ly and that key aspects of TikTok’s technology—including its powerful recommendation algorithm—were developed in-house, not acquired from Musical.ly.

ByteDance also says the vast majority of TikTok’s current users were acquired after the Musical.ly acquisition. So ByteDance argues that even if the president has the power to force a divestiture of Musical.ly, that wouldn’t justify forcing ByteDance to spin off or shut down TikTok altogether.

ByteDance also charges that the Trump administration has failed to seriously consider ByteDance’s proposals to address the government’s concerns—including its proposal to sell a share of the company to Oracle.

All of this means that TikTok’s fate is up in the air. TikTok likely won’t be forced into an immediate divestiture while the courts consider the company’s legal challenges. If TikTok can drag the proceedings out until January, it might find that the new Biden administration is more accommodating. President-elect Joe Biden hasn’t said whether he will continue Trump’s war on TikTok or pursue a more lenient approach.

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