(Bloomberg) — TikTok has sued the U.S. government over a new law that will force its Chinese parent company ByteDance Ltd. to divest itself of the popular video app or face a nationwide ban.
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The lawsuit marks the first legal challenge since Congress passed the law in April. The move aims to address national security concerns that the Chinese government could access user data or influence what is seen on the app, which would face a shutdown in January in the absence of a sale.
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TikTok has argued that the law will stifle free speech and harm creators and small business owners who benefit economically from the platform. The company previously said it spent more than $1.5 billion to isolate its U.S. operations and agreed to oversight from U.S. firm Oracle Corp.
“For the first time in history, Congress has enacted a law that subjects a single named speech platform to a permanent national ban and prohibits all Americans from participating in a unique online community of more than 1 billion people around the world,” the company said in a Tuesday filing in the U.S. Court of Appeals for the District of Columbia.
The legal battle comes after President Joe Biden signed into law a Ukraine-Israel aid package that includes the TikTok clause, which requires the app to be sold or shut down in the US by January. A lobbying effort by TikTok CEO Shou Chew has failed to persuade U.S. lawmakers who worry about the national security threat of China potentially accessing user data and disseminating propaganda to 170 million Americans — about half the population from the USA.
How TikTok Became a US-China National Security Issue: QuickTake
TikTok asked the court to rule that the law violates the Constitution and prohibit the Justice Department from enforcing it. TikTok is being represented by Covington and Burling LLP and Mayer Brown LLP.
The move indicates that ByteDance has no intention of trying to find a buyer for TikTok as the deadline approaches. For now, the app is authorized to operate in the US, which means the company does not need to seek an immediate injunction against the US. But as the deadline approaches for the company to sell the app or face a ban, the company may try to seek an emergency injunction.
For the US, the process means that government officials could be forced to publicly reveal confidential or sensitive information in court about why the law is justified and necessary. So far, U.S. officials have said the algorithm powering the app poses a national security threat that could be used by the Chinese government to carry out mass influence operations in America. However, the administration has not publicly presented specific evidence to support these claims.
The two sides could end up in a prolonged legal battle that could reach the Supreme Court.
TikTok could also ask the judge overseeing the case to speed up the briefing deadline, which could give the Supreme Court time to weigh in on the matter.
“TikTok is the underdog here,” said Bloomberg Intelligence analyst Matthew Schettenhelm. “It’s really hard to overcome Congress’ judgment on national security.” If the US has a weakness, it’s the lack of track record it has developed here in terms of exactly what the risk is, he said.
Read more: TikTok ready to fight US ban with 170 million users at stake
TikTok’s ties to China have faced scrutiny under previous administrations. Former President Donald Trump used an executive order to try to force the sale of the app to an American company or face a ban. But his administration also faced several legal challenges and judges blocked the ban. When Biden became president, he placed Trump’s ban under further review.
“Make no mistake, this is a ban, a ban on you and your voice,” Chew said in an in-app video the day the bill was signed. “Politicians may say otherwise, but don’t get confused. Many of those who signed the bill say banning TikTok is the ultimate goal.”
TikTok argued that a ban would devastate 7 million businesses and shut down a platform that contributes $24 billion annually to the U.S. economy.
Late last year, legislative efforts to ban or force the sale of TikTok stalled. But classified reports that raised national security concerns prompted a bipartisan group of U.S. lawmakers in March to plan legislation.
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“We give TikTok a 30% chance of winning and expect a decision in an expedited case in 4Q. D.C. Circuit judges are not national security experts and will likely defer to Congress’ judgment unless they find a clear violation of the First Amendment.”
– Matthew Schettenhelm, Litigation Analyst
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Meanwhile, TikTok and other platforms were hit with hundreds of lawsuits that blamed them for addicting young people to social media and causing mental distress. Montana became the first US state to enact a law that would ban residents from using the app. In December, a federal judge sympathized with TikTok’s free speech argument in blocking Montana’s measure while the legal challenge unfolded.
The initial deadline for divestment is set for January 19, one day before the next presidential inauguration. Biden could postpone the deadline for another 90 days.
(Updates with impact of the lawsuit from the seventh paragraph.)
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