A federal appeals court panel has upheld a law that could result in TikTok being banned within a few months, marking a significant defeat for the popular social media platform in its battle to remain operational in the United States.
The U.S. Court of Appeals for the District of Columbia Circuit rejected TikTok’s request to reverse the law, which mandates that TikTok sever its connections with its Chinese parent company ByteDance by a specified date in mid-January, failing which it faces a ban. Additionally, the court dismissed the company’s objection to the statute, claiming a violation of the First Amendment.
According to Judge Douglas Ginsburg, who authored the court’s opinion, “The First Amendment serves to safeguard free speech within the United States. In this instance, the government’s actions were solely aimed at safeguarding that freedom from a foreign adversary and restricting the said adversary’s capacity to amass data on individuals in the U.S.”
TikTok and ByteDance — another plaintiff in the lawsuit — are expected to appeal to the Supreme Court. Meanwhile, President-elect Donald Trump, who tried to ban TikTok during his first term and whose Justice Department would have to enforce the law, said during the presidential campaign that he is now against a TikTok ban and would work to “save” the social media platform.
Friday’s ruling came after the appeals court panel, composed of two Republican and one Democrat appointed judges, heard oral arguments in September. The three judges all denied TikTok’s petition. Judge Sri Srinivasan, the chief judge on the court who was appointed by former President Barack Obama, issued a concurring opinion.
The law, signed by President Joe Biden in April, was the culmination of a years-long saga in Washington over the short-form video-sharing app, which the government sees as a national security threat due to its connections to China.
The U.S. has said it’s concerned about TikTok collecting vast swaths of user data, including sensitive information on viewing habits, that could fall into the hands of the Chinese government through coercion. Officials have also warned the proprietary algorithm that fuels what users see on the app is vulnerable to manipulation by Chinese authorities, who can use it to shape content on the platform in a way that’s difficult to detect — a concern mirrored by the European Union on Friday as it scrutinizes the video-sharing app’s role in the Romanian elections.
However, a significant portion of the government’s information in the case has been redacted and hidden from the public as well as the two companies.
TikTok, which sued the government over the law in May, has long denied it could be used by Beijing to spy on or manipulate Americans. Its attorneys have accurately pointed out that the U.S. hasn’t provided evidence to show that the company handed over user data to the Chinese government, or manipulated content for Beijing’s benefit in the U.S. They have also argued the law is predicated on future risks, which the Department of Justice has emphasized pointing in part to unspecified action it claims the two companies have taken in the past due to demands from the Chinese government.
After the September hearing, some legal experts had said it was challenging to read the tea leaves on how the three judges would rule.
In a court hearing that lasted more than two hours, the panel appeared to grapple with how TikTok’s foreign ownership affects its rights under the Constitution and how far the government could go to curtail potential influence from abroad on a foreign-owned platform.
The judges pressed Daniel Tenny, a Department of Justice attorney, on the implications the case could have on the First Amendment. But they also expressed some skepticism at TikTok’s arguments, challenging the company’s attorney – Andrew Pincus – on whether any First Amendment rights preclude the government from curtailing a powerful company subject to the laws and influence of a foreign adversary.
In parts of their questions about TikTok’s ownership, the judges cited wartime precedent that allows the U.S. to restrict foreign ownership of broadcast licenses and asked if the arguments presented by TikTok would apply if the U.S. was engaged in war.
To assuage concerns about the company’s owners, TikTok says it has invested more than $2 billion to bolster protections around U.S. user data.
The company also argues the government’s broader concerns could have been resolved in a draft agreement it provided the Biden administration more than two years ago during talks between the two sides. It has blamed the government for walking away from further negotiations on the agreement, which the Justice Department argues is insufficient.
Attorneys for the two companies have claimed it’s impossible to divest the platform commercially and technologically. They also say any sale of TikTok without the coveted algorithm – the platform’s secret sauce that Chinese authorities would likely block under any divesture plan – would turn the U.S. version of TikTok into an island disconnected from other global content.
Still, some investors, including Trump’s former Treasury Secretary Steven Mnuchin and billionaire Frank McCourt, have expressed interest in purchasing the platform. Both men said earlier this year that they were launching a consortium to purchase TikTok’s U.S. business.
This week, a spokesperson for McCourt’s Project Liberty initiative, which aims to protect online privacy, said unnamed participants in their bid have made informal commitments of more than $20 billion in capital.
TikTok’s lawsuit was consolidated with a second legal challenge brought by several content creators – for which the company is covering legal costs – as well as a third one filed on behalf of conservative creators who work with a nonprofit called BASED Politics Inc.
If TikTok appeals and the courts continue to uphold the law, it would fall on Trump’s Justice Department to enforce it and punish any potential violations with fines. The penalties would apply to app stores that would be prohibited from offering TikTok, and internet hosting services that would be barred from supporting it.
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