TikTok, ByteDance sue US to halt app sale law
Joe Biden signed a bill requiring ByteDance to sell TikTok to an approved buyer by January 19, 2025, or face a US ban
TikTok and its parent company, ByteDance, have filed a lawsuit to block a recently signed law by Joe Biden. The law mandates the sale of the short video app or its potential ban from the US. The companies lodged the lawsuit on Tuesday against the US government in the court of appeals for the District of Columbia, arguing that the law is unconstitutional and violates free speech protections.
Signed by the president on April 24 as part of a broader foreign aid package, the law grants China’s ByteDance until January 19, 2025, to sell TikTok to an approved buyer. Failure to do so would lead to the US prohibiting app stores from offering TikTok and blocking internet hosting services from supporting the app.
In the lawsuit, the companies argue that complying with the divestiture mandated by the bill “is simply not commercially, legally, or technically feasible.”
“The Act will undeniably result in the shutdown of TikTok by January 19, 2025, depriving the platform’s 170 million American users of a unique means of communication,” the lawsuit stated.
Additionally, the lawsuit confirmed earlier reports that ByteDance would not sell TikTok without retaining its powerful recommendation algorithm, which has been instrumental in the platform’s success. According to the suit, the Chinese government “has explicitly stated that it would not approve a divestiture of the recommendation engine, which is crucial to TikTok’s success in the United States.”
The possibility of a TikTok ban has been increasing since Donald Trump’s initial, unsuccessful attempt to block the app in 2020. Critics of TikTok are concerned that the platform’s parent company, based in China, might gather sensitive user data and censor content that opposes the Chinese government—a notion TikTok refutes.
During the political turmoil, TikTok reportedly invested over $2 billion in measures to safeguard the data of its US users, as stated in the lawsuit. The lawsuit also emphasized further commitments made by the company in a 90-page draft National Security Agreement, which was formulated through discussions with the Committee on Foreign Investment in the United States (CFIUS). CFIUS is an interagency committee, overseen by the US Treasury Department, tasked with evaluating foreign investments in US businesses that raise national security issues.
CFIUS had been negotiating with TikTok to find resolutions, but the agreement stipulated that TikTok would accept a “shut-down option,” allowing the US government to suspend TikTok in the US if certain obligations were breached, as per the lawsuit.
However, in August 2022, as stated in the lawsuit, CFIUS ceased meaningful discussions about the agreement. By March 2023, CFIUS insisted that ByteDance would need to divest the US TikTok business.
Numerous experts have raised doubts about whether any potential buyer has the financial capacity to acquire TikTok, and whether both Chinese and US government agencies would grant approval for such a sale. The lawsuit states that relocating the TikTok source code to the US would require several years for a completely new team of engineers to become adequately familiar with it.
According to the current law, Biden has the authority to extend the January 19 divestiture deadline by three months if he believes ByteDance is making progress.
