TikTok CEO Shou Zi Chew testified at a House Energy and Commerce Committee hearing titled “TikTok: How Congress can protect U.S. data privacy and protect children from harm online,” as lawmakers review the app on Capitol Hill Chinese-owned video sharing app.
Evelyn Hochstein | Reuters
The future of social media company TikTok is more uncertain than ever on Tuesday after it sued the U.S. government over a law that would force Chinese parent company ByteDance to sell the app or face a nationwide ban.
President Joe Biden Legislation signed in April gives ByteDance nine months to find a buyer for the popular short-video app, with the option to extend by three months if a deal goes ahead. As we all know, the Protecting Americans from Apps Controlled by Foreign Adversaries Act passed with bipartisan support in both houses of Congress.
TikTok argues According to the company’s legal filings, the bill violates the First Amendment and makes a divestment “simply impossible: commercially, technically, legally.”
“For the first time in history, Congress has enacted a law imposing a permanent, nationwide ban on a single, designated speech platform and barring every American from participating in a unique online platform of more than 1 billion people worldwide,” the lawsuit states. Community.
U.S. lawmakers have long argued that foreign ownership of TikTok poses a national security risk. Former President Donald Trump attempted to ban the platform via an executive order in 2020, paving the way for a potential ban. The effort failed, but the issue has resonated as concerns grow about China’s growing influence in countries around the world.
Before the law was passed, TikTok spent more than $2 billion on an initiative called “Project Texas” to better protect U.S. user data from foreign influence. But lawmakers continued to press for the legislation regardless.
Whether TikTok’s lawsuit in the U.S. Court of Appeals for the D.C. Circuit succeeds depends largely on how the court treats the matter. Is this a First Amendment issue or a national security issue?
“One of the really hard questions”
Gus Hurwitz, a senior fellow and academic director at the center, said the D.C. Circuit will likely agree to expedite the case, meaning a full opinion can be provided before a sale is required. Center for Technology, Innovation and Competition University of Pennsylvania Carey School of Law.
Hurwitz said TikTok and ByteDance may ask the court to put the law on hold or issue a preliminary injunction, effectively putting the law on hold until a decision is made.
“If the court doesn’t impose a stay like this, I think it’s a very bad sign for TikTok and ByteDance,” Hurwitz told CNBC. “It shows that the court thinks the law is likely to be maintained.”
TikTok could also file another lawsuit on behalf of its users, which Hurwitz said would strengthen the company’s First Amendment arguments and make it harder for Congress to win if courts view it in that light.
“This is one of the really tough issues for both sides,” Hurwitz said.
Gautam Hans, associate professor of clinical law at Cornell University Law School, said courts take the issue of suppression of speech very seriously but also protect national security. The two priorities rarely conflict, he said.
“These situations are relatively rare,” Hans said in an interview. “From what I understand, this law is unprecedented.”
Hans said it also differs from past attempts to ban TikTok in that the bill has bipartisan support, which could sway the courts. Regardless of what happens in circuit court, there’s a good chance the case will eventually make its way to the U.S. Supreme Court, Hans said.
“I don’t think this case will be solved easily,” Hans said.
Weigh sales
ByteDance could streamline the process and agree to divest TikTok so that its majority stake is outside China.But the company has It is said Said it would rather shut down TikTok’s U.S. business than sell it. “There’s no doubt about it: this is a ban,” TikTok CEO Shou Chew said in a video on the app.
Potential sales are further complicated by problems with TikTok’s algorithm, a key piece of technology that the app uses to make recommendations to users. China may have to approve the transfer of the algorithm, but experts don’t think that will happen.
“It’s a bit like if you sell your house, but you take out all the doors and windows, who’s going to buy it?” Hans said.
Still, there are some interested suitors.
Former Treasury Secretary Steven Mnuchin told CNBC’s David Faber on Tuesday that he remains “very interested” in buying or investing in TikTok. Even without the algorithm, the platform could likely be rebuilt within a year, he said. But he said it would be a more difficult deal if TikTok spent six months litigating in the meantime.
“The best outcome is if they agree to a deal now, you’ll have a year to rebuild the technology, which I think will be a significant effort, but it can be done,” Mnuchin said.
As of now, TikTok can continue to operate. Hurwitz said that until the last moment, the company had shown no intention to sell or cease operations in the United States.
“It’s going to take a while,” he said.
watch: Here’s what to know about the TikTok lawsuit
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