TikTok fails to halt law that could lead to US ban

The law orders TikTok to be banned in the US if the app does not divest from its parent ByteDance by January 19. Photo / Getty Images

A US appeals court has upheld a law requiring TikTok’s owner ByteDance to sell the platform or face a ban next year, dealing a major blow to the Chinese company behind the video app.

The law, signed by President Joe Biden this year, orders TikTok to be banned in the country if the app does not divest from its parent by January 19 2025, the day before Donald Trump is inaugurated as President.

The unanimous ruling from the US Court of Appeals for the District of Columbia Circuit said the law – which hits at the core of a hot-button national security issue involving China and received strong bipartisan support in Congress – was constitutional and did not violate First Amendment protections for free speech, as TikTok had claimed.

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”, the panel wrote.

The decision puts TikTok in a precarious position in one of its biggest markets, although the law’s political future is uncertain. On the campaign trail before his re-election, Trump said he opposed the platform’s ban and promised to “save” the app.

In an email to staff, TikTok chief executive Shou Zi Chew wrote that the next step would be to “seek an injunction of the ban, pending review by the US Supreme Court”, according to a person familiar with the matter.

The law requires Apple and Google to remove the social media app, which is wildly popular among younger Generation Z users, from their app stores if a divestiture does not take place before the January deadline. It also bans the app from web-hosting services.

TikTok said after the ruling: “The Supreme Court has an established historical record of protecting Americans’ right to free speech, and we expect they will do just that on this important constitutional issue.

“Unfortunately, the TikTok ban was conceived and pushed through based upon inaccurate, flawed and hypothetical information, resulting in outright censorship of the American people.”

US Attorney-General Merrick Garland called the ruling “an important step in blocking the Chinese Government from weaponising TikTok to collect sensitive information about millions of Americans, to covertly manipulate the content delivered to American audiences, and to undermine our national security”.

A TV screen shows the preliminary results of the US elections in a restaurant in Hong Kong on November 6. On the campaign trail before his re-election, Donald Trump said he opposed the ban on TikTok. (Photo by Mladen Antonov, AFP

The Chinese embassy in Washington said the law would have “a serious impact on the online social platform used by half of Americans” and was a “blatant act of commercial robbery”.

The Trump transition team did not respond to a request for comment. But Mike Waltz, the Florida lawmaker and incoming US national security adviser, told Fox Business Network that Trump “wants to save TikTok”.

“We absolutely need to allow the American people to have access to that app, but we have to protect our data as well,” said Waltz, who has in the past called for TikTok to be banned.

Waltz added that Trump’s stance was to “allow the American people to have full access to what is a great product, but at the same time protect their data”.

Marco Rubio, the Florida senator and China hawk who Trump has nominated as his Secretary of State, has also supported banning TikTok.

In May, TikTok and ByteDance sued the US Government to block the bill, claiming it was unconstitutional and violated First Amendment protections for free speech.

TikTok has denied China’s Government has any control over the app or that it has handed over any data to Beijing. Its lawyers also argued concerns about propaganda on the app should be handled by requiring disclosures, rather than a blanket divest-or-ban law.

US officials have argued ByteDance could be compelled to share the personal information of the 170 million US TikTok users with officials in Beijing under Chinese law and wield the app’s algorithms and moderation to spread propaganda and misinformation.

The Department of Justice (DoJ) earlier this year alleged some of TikTok’s US user data had been stored in China.

The court on Friday said the Government’s national security “justifications” for the law were “compelling”.

China “poses a particularly significant hybrid commercial threat” because of the statutes governing Chinese companies, the judges said, adding Beijing also “uses its cyber capabilities to support its influence campaigns around the world”.

China has “positioned itself to manipulate public discourse on TikTok in order to serve its own ends”, the judges wrote. Its “ability to do so is at odds with free speech fundamentals”.

The judges recognised their ruling “has significant implications” for the app and its users. But they argued that “burden is attributable to [China’s] hybrid commercial threat to US national security”, rather than the US Government, which “engaged with TikTok through a multiyear process in an effort to find an alternative solution”.

TikTok has complained that much of the US Government’s evidence is classified, meaning it has not had the opportunity to rebuff the claims about it, and argued a sale would be “unfeasible”.

Beijing has publicly said it would not allow the divestiture of the platform’s recommendations algorithm by ByteDance, and has export control laws that would block such a spin-off. Biden could also extend the ban-or-sale deadline by 90 days.

Before his re-election, Trump said he would not ban TikTok upon his return to the White House, in an attempt to preserve “competition” in a market dominated by Mark Zuckerberg’s Meta, which the President-elect has described as an “enemy of the people”.

It is unclear exactly how he could save the app. Experts suggested he could tell Congress to repeal the law or press the DoJ not to enforce it.

Any move would represent a U-turn from 2020 when then-president Trump issued an executive order to block the app in the US and gave ByteDance 90 days to divest from its American assets and any data that TikTok had collected in the US.

That order was blocked by the courts and ultimately revoked by Biden.

Shares in TikTok rivals Meta and Snap, whose revenues have been threatened by the app’s rapid rise in recent years, both rose about 2% on the news.

Written by: Hannah Murphy in San Francisco and Stefania Palma and Demetri Sevastopulo in Washington

© Financial Times