Tik Tok’s US operations faced uncertainty after a federal appeals court dismissed a legal challenge to legislation requiring the social media platform to separate from its Chinese parent company or face a ban by mid-January, on Friday.
The US Court of Appeals for the District of Columbia Circuit’s three-judge panel unanimously upheld the law’s constitutional validity, dismissing claims from both companies that the statute infringed upon their rights and those of US-based TikTok users.
The government has called for ByteDance, TikTok’s parent company, to divest its stakes in the platform.
If ByteDance fails to comply and TikTok is banned, it could have a profound impact on content creators who rely on the app for their livelihood and users who turn to it for entertainment and social connection.
What the ruling argues
TikTok and ByteDance, the plaintiffs in the case, argued that the law violated the First Amendment and constituted an unconstitutional bill of attainder by unfairly targeting the two companies.
The Justice Department remarked that TikTok presents national security risks due to its Chinese connections, suggesting Chinese authorities could demand ByteDance share US user data or manipulate platform content.
However, no public evidence of such occurrences has been presented.
Judge Douglas Ginsburg authored the appeals court decision, stating that the law was “carefully crafted to deal only with control by a foreign adversary”.
The court dismissed claims that the law constituted an unlawful bill of attainder or violated the Fifth Amendment’s protections against property seizure.
Ginsburg ruled that the law did not infringe on the First Amendment, as it does not aim to “suppress content or mandate a specific mix of content” on TikTok.
“Content on the platform could in principle remain unchanged after divestiture, and people in the United States would remain free to read and share as much PRC propaganda (or any other content) as they desire on TikTok or any other platform of their choosing,” Ginsburg said.
What TikTok said in statement
“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,” TikTok spokesperson Michael Hughes said in a statement.
“Unfortunately, the TikTok ban was conceived and pushed through based upon inaccurate, flawed and hypothetical information, resulting in outright censorship of the American people,” Hughes continued, according to The Associated Press.
The statute “will silence the voices of over 170 million Americans here in the US and around the world on January 19th, 2025,” he added.
What are Trump‘s commitment
President-elect Donald Trump‘s position adds complexity, having shifted from his previous stance of banning TikTok to now opposing such measures.
Whilst his transition team hasn’t detailed specific plans, spokeswoman Karoline Leavitt confirmed Trump’s commitment to “save TikTok”.
After Trump assumes office on January 20, his Justice Department would be responsible for enforcing the law and addressing any violations. Penalties would target app stores that defy a TikTok ban and internet hosting services that continue to support the platform.
After 20 January, his Justice Department would oversee law enforcement, including penalties for non-compliant app stores and hosting services. Trump could potentially determine whether a sale removes “foreign adversary” control or advocate for legislative repeal, though this would require Republican support.
What happens next in the case
ByteDance and TikTok are likely to challenge the ruling in the Supreme Court, though it remains unclear if the court will take up the case.
The companies confirmed their intentions to take their case to high court, saying the Supreme Court has “an established historical record of protecting Americans’ right to free speech”.
“We expect they will do just that on this important constitutional issue,” a company spokesperson said.
Professor Alan Morrison of The George Washington University Law School anticipates the Supreme Court will consider the case due to its unique legal questions. He notes that the companies must secure an emergency stay to prevent enforcement of the 19 January divestiture deadline, potentially extending the proceedings.
Is TikTok up for sale
ByteDance has firmly stated its position against selling TikTok. Additionally, due to Chinese export regulations implemented in 2020, any potential sale of TikTok’s core algorithmic technology would likely face regulatory obstacles.
Any acquisition without the underlying algorithm would essentially result in purchasing a basic platform structure, devoid of the technical innovations that transformed TikTok into a significant cultural influence.
Nevertheless, certain investors have shown interest in acquiring TikTok, including former US Treasury Secretary Steven Mnuchin and businessman Frank McCourt.
Republican Rep. John Moolenaar of Michigan, chairman of the House Select Committee on China, expressed optimism that former President Trump could enable an American acquisition of TikTok, ensuring its continued operation in the US
What it means if TikTok were banned
If TikTok were banned, advertisers would likely shift their focus to other social media platforms. Following the ruling, shares of Meta Platforms, a major competitor in the online ad space, surged to an intraday record high, closing up 2.4 per cent .
Alphabet, the parent company of YouTube—a rival to TikTok—also saw its stock rise, ending the day 1.25 per cent higher.
