Tiktok to Challenge Trump's Crackdown in Court Amid Rising Dispute

TikTok plans to sue the U.S. government, the company confirmed Saturday, 22 August, 2020, arguing that President Donald Trump ’s moves to block the app had deprived it of due process and claiming it had been unfairly and incorrectly treated as a security threat.

The lawsuit, which the company plans to file next week, would amount to the most public pushback against the U.S. by TikTok, which is owned by the Chines internet company ByteDance.

“Even though we strongly disagree with the administration’s concerns, for nearly a year we have sought to engage in good faith to provide a constructive solution,” Josh Gartner, a TikTok spokesman, said in a statement. “What we encountered instead was a lack of due process as the administration paid no attention to facts and tried to insert itself into negotiations between private businesses.”

For weeks, Trump has railed against TikTok and its ties to China, arguing that the app was a national security threat and that it could share data about its users with the Chinese government. On Aug. 6, Trump issued an executive order against TikTok, saying it would ban transactions with the app within 45 days. A week later, he issued a separate executive order giving ByteDance 90 days to divest from its U.S. assets and any data that TikTok had gathered in the U.S.

Trump’s actions have pushed ByteDance to seek a sale of TikTok’s U.S. operations to a U.S. company. Microsoft and Oracle are among those that have recently held discussions for such a deal. The companies remain in negotiations for a potential acquisition of TikTok, which has more than 100 million regular users in the U.S.

TikTok, which has repeatedly denied that it shares data with Beijing, previously tried to pacify the Trump administration. But as the White House’s actions escalated, TikTok became more critical of its moves.

Representatives for the White House and the Department of Justice did not immediately respond to requests for comment. Reuters previously reported on TikTok’s plan to file a lawsuit.

Trump’s first executive order against TikTok draws its legal authority from the International Emergency Economic Powers Act, which allows the president to regulate economic transactions in a national emergency. Past administrations have used it to sanction foreign governments as well as terrorists, drug kingpins and hackers, but have never used it against a global technology company.

Past administrations have also used the authority somewhat cautiously, wary that a legal challenge could result in a court curtailing some of the president’s expansive powers. Some Trump administration advisers have been concerned about such an outcome, but others view the economic powers as a kind of blank check, giving the administration wide- ranging authority to restrict U.S. commerce.

Jason M. Waite, a partner at Alston & Bird, said the order raised serious questions, including whether the provision could be used to target people or companies registered in the U.S., even if they had a foreign parent company.

“Using this authority against a Hezbollah leader does not present litigation risk like using this authority against a major global technology company,” he said. He added that the odds would be in the president’s favor but that the administration had still opened itself up to the possibility of having its economic powers curtailed.

In addition to an executive order against TikTok, Trump also issued an order to cease operations of WeChat, the chat and commerce app that is owned by Chinese company Tencent and is highly popular in Asia. Similar to TikTok, Trump gave Tencent a 45-day deadline to wind down its operations in the U.S.

But as Trump has ramped up his attacks against Chinese-backed companies, the fallout has spilled over into the West. Dozens of U.S. companies rely on partnerships with WeChat and Tencent to do business globally; a cancellation of the service in the U.S. could disrupt corporate America.

As for TikTok, the company appears to have a stronger potential backup plan than Tencent’s WeChat: It is in discussions with multiple suitors for a potential sale. The White House has repeatedly pressed TikTok to store American user data on U.S. servers, something that a sale to a U.S. company is likely to accomplish.

But TikTok also faces continued pressure from Facebook as advertisers flock to other social media platforms while TikTok is embroiled in controversy.

After early attempts to purchase the video app Musical.ly — a company that was eventually joined with TikTok — Facebook instead has tried to clone TikTok’s main video features. In 2018, Facebook created Lasso, a stand-alone app similar to TikTok. And in June, Instagram introduced Reels, a TikTok-like feature.

Mark Zuckerberg, Facebook’s chief executive, has repeatedly pressured lawmakers to support U.S. tech companies. In congressional hearings, Zuckerberg has warned lawmakers of the impending threat that Chinese-backed tech startups could pose to Silicon Valley’s technological dominance.