Federal Appeals Court Upholds Law That Could Ban TikTok in the U.S.



In a significant blow to TikTok, a federal appeals court has upheld a law that could lead to the popular social media app being banned in the United States. The U.S. Court of Appeals for the District of Columbia Circuit ruled that the law, which requires TikTok to sever ties with its China-based parent company ByteDance or face a ban by mid-January, is constitutional. This ruling comes as TikTok fights to maintain its presence in the U.S. market.

The court's decision rebuffed TikTok's argument that the law violated the First Amendment and unfairly targeted the platform. The court stated, "The First Amendment exists to protect free speech in the United States. Here the Government acted solely to protect that freedom from a foreign adversary nation and to limit that adversary’s ability to gather data on people in the United States."

TikTok and ByteDance, who are plaintiffs in the lawsuit, are expected to appeal to the Supreme Court. Interestingly, President-elect Donald Trump, who had previously attempted to ban TikTok during his first term, has now expressed opposition to the ban and has pledged to work to "save" the platform.

The law, signed by President Joe Biden in April, marks the culmination of a long-standing debate in Washington over TikTok, which the government views as a national security threat due to its connections to China. The U.S. government is concerned that TikTok collects vast amounts of user data, including sensitive information on viewing habits, which could potentially be accessed by the Chinese government. Additionally, officials have warned that TikTok's proprietary algorithm, which determines what users see on the app, could be manipulated by Chinese authorities to influence content in a way that is difficult to detect.

Despite these concerns, much of the government's evidence in the case has been redacted and remains hidden from both the public and the companies involved. TikTok has consistently denied that it could be used by Beijing to spy on or manipulate Americans. The company’s attorneys have pointed out that the U.S. has not provided evidence to show that TikTok has handed over user data to the Chinese government or manipulated content for Beijing’s benefit in the U.S. They argue that the law is based on hypothetical future risks, which the Department of Justice has emphasized by pointing to unspecified actions allegedly taken by the companies in the past due to demands from the Chinese government.

The appeals court's ruling followed oral arguments heard in September. During the hearing, the judges grappled with the implications of TikTok’s foreign ownership on its constitutional rights and the extent to which the government could limit potential foreign influence on a platform owned by a foreign entity. The judges questioned both the Department of Justice attorney and TikTok’s attorney on the First Amendment implications and the potential wartime precedent that allows the U.S. to restrict foreign ownership of broadcast licenses.

In response to concerns about its ownership, TikTok has invested over $2 billion to enhance protections around U.S. user data. The company also argues that the government’s broader concerns could have been addressed in a draft agreement it provided to the Biden administration over two years ago. TikTok blames the government for walking away from further negotiations on the agreement, which the Justice Department argues is insufficient.

Attorneys for TikTok and ByteDance have claimed that it is commercially and technologically impossible to divest the platform. They also argue that any sale of TikTok without its coveted algorithm would render the U.S. version of the app disconnected from global content, as Chinese authorities would likely block the algorithm under any divestiture plan.

Despite these challenges, some investors, including Trump’s former Treasury Secretary Steven Mnuchin and billionaire Frank McCourt, have expressed interest in purchasing TikTok’s U.S. business. McCourt’s Project Liberty initiative, which aims to protect online privacy, has reportedly received informal commitments of over $20 billion in capital from unnamed participants.

TikTok’s lawsuit has been consolidated with a second legal challenge brought by several content creators, for which the company is covering legal costs, as well as a third challenge filed on behalf of conservative creators associated with BASED Politics Inc.

If TikTok appeals and the courts continue to uphold the law, it will be up to Trump’s Justice Department to enforce it and impose penalties for any violations. These penalties would apply to app stores that offer TikTok and internet hosting services that support the app.