TikTok/ByteDance cite harms to free speech and claim zero ownership by the People’s Republic of China.
TikTok Inc. and its parent company ByteDance Ltd. have been granted review by the Supreme Court in which the company seeks to halt enforcement of the Protecting Americans from Foreign Adversary Controlled Applications Act (“Act” or “Foreign Adversary Act”). Scheduled to go into effect one month from now on Jan. 19, 2025 – the day before Inauguration Day – the Act would ban TikTok in the United States unless it is divested to a company that is not adverse to America.
On Dec. 13 the D.C. Circuit denied TikTok interim relief which it requested to give the Supreme Court time to examine the matter. The high court acted quickly. It did not wait for a response from the Department of Justice, but did not yet grant an injunction that would delay enforcement of the Act pending review.
TikTok is widely used to create, share, and watch videos, with more than 170 million monthly American users and more than 1 billion users worldwide. Americans use TikTok to communicate on various topics, including politics, religion, sports, and entertainment, the company says, adding that 17% of U.S. adults regularly get news from TikTok. In addition to being informative, promotional, and sometimes wildly entertaining, user-generated content can also be absurd, violent, inappropriate for children, and misleading.
But TikTok points out that it is an American company headquartered in California, and ByteDance is a privately held holding company incorporated in the Cayman Islands, which is common for Chinese tech companies. ByteDance is headquartered in Bejing, however. The Associated Press reported in March that, according to ByteDance, 60% of its shares are owned by non-Chinese investors, including the Carlyle Group and Kohlberg Kravis Roberts in the U.S. and Japan’s SoftBank Group. Employees own 20% and its founders the remaining 20%.
TikTok is offered in more than 170 countries but not in mainland China, the company says, although it operates the platform there as Douyin, which translates to “shaking sound.” The two companies share a logo, an image of a shaking lowercase music note. Douyin is said to be the precursor to TikTok and the platform is the same, although the types of content users generate, or are permitted to generate, are different. No arm of the Chinese government has an ownership stake in TikTok Inc. or ByteDance Ltd., the company claims, but concerns are that the Chinese Communist Party has direct influence over the company and its leadership.
Since 2019, TikTok says it has cooperated with the U.S. government to address its concerns, leading to the development of a detailed National Security Agreement. The agreement included storing U.S. user data in the Oracle cloud and creating a new entity, TikTok U.S. Data Security, supervised by a special board approved by the U.S. government.
Despite voluntary implementation of many security measures, TikTok says it was never signed because CFIUS – the Committee on Foreign Investment in the United States, part of the Treasury Department – ceased engagement in September 2022 and later demanded divestment without explaining why the agreement was insufficient.
The TikTok Ban
The Act automatically deems any application operated by ByteDance Ltd. or TikTok Inc. as a “foreign adversary controlled application” and prohibits various entities from providing services to such applications. The Act includes a provision for a “qualified divestiture” to exempt an application from its prohibitions, but the Government does not contest that such divestiture is infeasible within the Act’s timeframe, TikTok writes.
The Act’s legislative history includes concerns about TikTok being used for data collection, espionage, and spreading misinformation, disinformation, and propaganda. Legislators expressed various concerns, including TikTok exposing children to harmful content, restricting topics sensitive to the Chinese Government, and amplifying certain viewpoints.
TikTok filed a petition for review in the D.C. Circuit. The government justified the Act based on potential risks of China manipulating content on TikTok or accessing user data. However, TikTok claims, the government admitted having no evidence to support these concerns. The D.C. Circuit denied the petition for review and TikTok’s request for an injunction pending Supreme Court review.
When the D.C. Circuit issued its decision in favor of the Act, Attorney General Merrick B. Garland called it “an important step in blocking the Chinese government from weaponizing TikTok to collect sensitive information about millions of Americans, to covertly manipulate the content delivered to American audiences, and to undermine our national security. As the D.C. Circuit recognized, this Act protects the national security of the United States in a manner that is consistent with the Constitution. The Justice Department is committed to defending Americans’ sensitive data from authoritarian regimes that seek to exploit companies under their control.”
Deputy Attorney General Lisa Monaco added that the Act and the DOJ’s enforcement “Have never been about restricting free speech but rather breaking the ties that bind TikTok to the regime in Beijing.”
TikTok’s Argument: We’re Likely to Win
TikTok correctly argued that the Supreme Court would likely grant certiorari and that the company is “sufficiently likely to prevail.”
The case raises significant constitutional questions, TikTok argues, and its outcome will affect millions of Americans who use TikTok for communication, community, and income. If allowed to stand, the case sets dangerous precedent upholding a law targeting an American company – one engaged in expressive activity – for disfavored treatment, the application says. Further, the ban is automatic, TikTok says, which denies its right to a rigorous review.
The government’s content-manipulation concerns are not a valid reason to ban TikTok, the company says, as it concerns altering the content on TikTok rather than addressing covert manipulation. The government’s data-protection interest is “underinclusive,” the company maintains, because the Act exempts other applications that pose similar risks.
The government failed to consider less-restrictive alternatives, such as disclosure requirements or the comprehensive National Security Agreement, the application says. Singling out TikTok for worse treatment than other providers, effectively banning it from operating TikTok, constitutes a bill of attainder, the company argues.
The Act will cause extreme harm to TikTok as it will lose users, creators, revenue, commercial relationships, and competitive position, adding the loss of First Amendment freedoms constitutes irreparable injury. The resulting economic harm will not be recoverable from the government due to sovereign immunity.
While these important questions are addressed, TikTok says it is in the public interest to order an interim injunction, specifically referring to preserving its own and its users’ First Amendment rights and their ability to generate revenue. An interim injunction would not harm the government, TikTok maintains.
The application notes that the Act will take effect the day before President-elect Trump is inaugurated, saying it is possible that the new administration will pause enforcement of the Act or mitigate its consequences. Talk of the ban was started by the Trump during his first term.
Trump’s Executive Order
While President Biden signed the Act into law in April, the effort was initiated by his predecessor. In 2020, then-President Trump cited national security concerns when he issued an executive order giving ByteDance 45 days to sell TikTok or face a ban. The former and future president issued his order under the authority of the International Emergency Economic Powers Act and the National Emergencies Act, declaring an emergency in the information and communications technology and services supply chain.
The executive order said the spread of mobile applications developed by Chinese companies, particularly TikTok, threatened national security, foreign policy, and the economy. Further, it said TikTok collects extensive user data, including location, browsing, and search histories, which could be accessed by the Chinese Communist Party for malicious purposes, such as tracking federal employees, blackmail, and corporate espionage. TikTok reportedly censors politically sensitive content, the order went on to say, and may be used for disinformation campaigns benefiting the Chinese Communist Party.
Critics say Trump’s change of heart was politically motivated, but he told an CNBC interviewer that he still views the platform as a security and privacy risk but now opposes an outright ban.
Supreme Court Order
The companies suggested that their application be treated as a petition for a writ of certiorari, which the chief justice granted. The question the court will address is: “Whether the Protecting Americans from Foreign Adversary Controlled Applications Act, as applied to petitioners, violates the First Amendment.” Simultaneous opening briefs and any amicus briefs are due Dec. 27 and reply briefs are due Jan. 3, 2025. Oral argument is set for Jan. 10, 2025.
Amici Briefs So Far
Professor Matthew Steilen of the University at Buffalo School of Law said the Foreign Adversary Act is a “bill of attainder,” a legislative act punishing an individual or a group often without trial. He says the court should issue an injunction. “It specifically names TikTok and ByteDance and imposes punishment upon them. It imposes burdens mirroring those imposed by historical bills of attainder. It brands TikTok and ByteDance with a mark of disloyalty; it bars them from pursuing their chosen vocation; and it forbids them from continuing to own their property. The Act cannot reasonably be said to have a non-punitive purpose, and the Congressional Record reveals that it was instead motivated by a punitive one. Nothing prohibits Congress from addressing security risks associated with foreign governments, but it cannot sidestep the Constitution’s procedures for doing so.”
American Civil Liberties Union, Electronic Frontier Foundation, and the Knight First Amendment Institute at Columbia University wrote: “Such a ban is unprecedented in our country and, if it goes into effect, will cause an extraordinary disruption in Americans’ ability to engage with the content and audiences of their choice online. The D.C. Circuit’s opinion upholding the ban ostensibly applied strict scrutiny under the First Amendment, but it subjected the government’s assertions to little genuine scrutiny in the end. In failing to closely examine the government’s claims, the court of appeals ran afoul of this Court’s rulings. At the same time, it rightly acknowledged one central fact bearing on Applicants’ requests for temporary relief: the government has not presented credible evidence of ongoing or imminent harm caused by TikTok. That being the case, this Court should have the opportunity to assess the merits of the ban for itself , properly applying the governing First Amendment standards, before Americans are forced from an app used by so many to speak and share.”
The Foundation for Individual Rights and Expression, the Institute for Justice, and the Reason Foundation filed a brief in support of TikTok. “The law imposes a prior restraint, and restricts speech based on both its content and viewpoint. As such, if not unconstitutional per se, it should be subject to the highest level of First Amendment scrutiny.” They argue that given the “grave consequences” to free speech doctrine and the millions of TikTok users, the high court should at least put the Act on hold before allowing the “drastic policy” to take effect. “Although the appellate panel was correct that the Act should be subject to the highest level of First Amendment scrutiny, it failed to actually hold the government to its burden of proof, and deferred too readily to unsupported assertions of a national security threat” posed by the Chinese government.
Senator Mitch McConnell said the court should deny TikTok’s emergency application. “Their First Amendment arguments are meritless and unsound. While the forced divesture may cause them irreparable harm, any delay caused by an injunction would be contrary to the public interest. This is a standard litigation play at the end of one administration, with a petitioner hoping that the next administration will provide a stay of execution. This Court should no more countenance it coming from foreign adversaries than it does from hardened criminals.”
Updated 12/18/2024 at 5 p.m. Eastern.
