WASHINGTON: A US federal appeals court on Friday upheld a law requiring China-based ByteDance to divest popular short video app TikTok in the US by early next year or face an injunction. ban.
The decision is a complete victory for the Department of Justice and opponents of the Chinese-owned app, and a severe blow to ByteDance. The ruling now raises the possibility of an unprecedented ban of just six weeks on a social media app used by 170 million Americans.
The ruling will likely be appealed by ByteDance and TikTok to the Supreme Court or the full appeals court panel.
Free speech advocates immediately criticized the ruling. The American Civil Liberties Union said it set a “flawed and dangerous precedent.”
“Banning TikTok blatantly violates the First Amendment rights of millions of Americans who use the app to express themselves,” said Patrick Toomey, deputy director of the ACLU’s National Security Project. and communicate with people around the world.”
But the appeals court said the law “is the culmination of far-reaching bipartisan action by Congress and successive presidents. It is carefully crafted to deal only with foreign adversary control, and it is part of a broader effort to counter the well-founded national security threat posed by the People’s Republic of China (PRC). People’s Republic of China) caused.”
US appeals court judges Sri Srinivasan, Neomi Rao and Douglas Ginsburg considered legal challenges brought by TikTok and its users to the law that gives ByteDance until January 19 to sell or divest TikTok’s US assets would otherwise face a ban.
The decision – unless the Supreme Court overturns it – puts TikTok’s fate in the hands of first President JoeBiden on whether to extend by 90 days the January 19 deadline to force a sale and then that is for President-elect Donald Trump, who will take office on January 20. But it is unclear whether ByteDance can meet the heavy burden of showing it has made significant progress in necessary divestment to activate the renewal.
Trump, who unsuccessfully tried to ban TikTok during his first term in 2020, said before the November presidential election that he would not allow a TikTok ban.
There was no immediate comment from the Justice Department or TikTok on the decision.
The decision upholds a law that gives the US government sweeping powers to ban other foreign-owned apps that may raise concerns about the collection of Americans’ data. In 2020, Trump also tried to ban Tencent-owned WeChat but was blocked by the court.
Shares of Meta Platforms META.O, which competes with TikTok in online advertising, hit a record high the day after the ruling, rising more than 3%. Alphabet, Google’s parent company, GOOGL.O, the YouTube video platform that also competes with TikTok, rose more than 1% at session highs after the ruling.
TIKTOK BOARD looms
The court acknowledged its decision would result in a Jan. 19 ban on TikTok that was not extended by Biden.
“Millions of TikTok users will therefore need to find alternative means of communication,” the court said, citing “China’s compounding trade threat to U.S. national security, not right to the US Government, which has cooperated with TikTok for many years.” process in an effort to find an alternative.”
The opinion was written by Ginsburg, who was appointed by President Ronald Reagan, along with Rao, who was appointed to the bench by Trump, and Srinivasan, who was appointed by President Barack Obama.
Chinese-owned TikTok poses a serious national security threat because it has access to massive personal data of Americans, the Justice Department said, adding that China could covertly manipulates the information Americans consume through TikTok.
US officials also warned that TikTok’s management was at the mercy of the Chinese government, which could force the company to share US users’ data.
TikTok denied that it has or will share US user data, and accused US lawmakers in the lawsuit of promoting “speculative” concerns.
TikTok and ByteDance argue that this law is unconstitutional and violates Americans’ freedom of speech. They called it “a radical departure from this country’s tradition of supporting an open Internet.”
Reuters reported that ByteDance, backed by Sequoia Capital, Susquehanna International Group, KKR & Co KKR.N and General Atlantic, among others, was valued at $268 billion in December 2023 when the company offered buy back shares worth about 5 billion USD from investors. at that time.
The law prohibits app stores such as Apple AAPL.O and Alphabet and Google’s GOOGL.O from offering TikTok and bans internet hosting services from supporting TikTok unless ByteDance divests TikTok ahead of time.
Apple and Google did not immediately respond to requests for comment.
In a concurring opinion, Srinivasan acknowledged the decision will have a major impact, noting “170 million Americans use TikTok to create and watch all forms of free expression and interact with each other and with the world. And yet, in part precisely because of the platform’s expanding reach, Congress and many Presidents have determined that divestment from (Chinese) control is essential to protect security. our nation.”
He added that “Because the record reflects that Congress’s decision was considered, consistent with long-standing regulatory practice, and did not have an institutional intent to suppress particular messages or ideas, We have no right to set it aside.”
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