TikTok and its Chinese parent company ByteDance filed a lawsuit in U.S. federal court on Tuesday, aiming to block a law signed by President Joe Biden that would compel the divestiture of the short video app used by 170 million Americans or prohibit its operation.
The companies lodged their lawsuit in the U.S. Court of Appeals for the District of Columbia Circuit, arguing that the law violates several aspects of the U.S. Constitution, including First Amendment free speech protections. Biden signed the law on April 24, giving ByteDance until Jan. 19 to sell TikTok or face a ban.
“The Act (law) will force a shutdown of TikTok by January 19, 2025, silencing the 170 million Americans who use the platform to communicate in ways that cannot be replicated elsewhere,” the lawsuit stated.
The White House has expressed a desire to end Chinese-based ownership due to national security concerns but has not advocated for a TikTok ban. It declined to comment on the lawsuit, and the U.S. Justice Department did not respond immediately to requests for comment.
This legal move is the latest by TikTok to counter efforts to shutter its operations in the United States. Concerns among U.S. lawmakers about China potentially accessing data on Americans or spying on them via the app led to the law’s overwhelming passage in Congress shortly after its introduction.
The law prohibits app stores from offering TikTok and bars internet hosting services from supporting it unless ByteDance divests TikTok by Jan. 19.
Chinese government’s opposition
The suit also highlighted the Chinese government’s opposition to divesting the recommendation engine crucial to TikTok’s success in the United States. The companies requested the D.C. Circuit to block U.S.
According to the lawsuit, global institutional investors, including BlackRock, General Atlantic, and Susquehanna International Group, own 58% of ByteDance. The company’s Chinese founder owns 21%, while employees, including about 7,000 Americans, own the remaining 21%.
The legal battle over TikTok is a significant aspect of the ongoing conflict between the United States and China regarding internet and technology.
TikTok has invested $2 billion in measures to protect U.S. user data and made additional commitments outlined in a 90-page draft National Security Agreement developed through negotiations with the Committee on Foreign Investment in the United States (CFIUS).
However, discussions with CFIUS regarding the agreement halted in August 2022, and in March 2023, ByteDance was informed by CFIUS that divesting the U.S. TikTok business was necessary. CFIUS, chaired by the U.S. Treasury Department, reviews foreign investments in American businesses and real estate with national security implications.
