On Friday, a U.S. federal appeals court upheld a law that mandates Chinese-based ByteDance to divest its popular short video app TikTok in the United States by early next year or face a ban.
The Justice Department criticizes the Chinese-owned app, dramatically increasing the likelihood of an unprecedented ban on a social media platform used by 170 million Americans in just six weeks.
The appeals court endorsed the law as a bipartisan effort, backed by two presidents, to mitigate a well-documented national security threat posed by the People’s Republic of China (PRC). The Justice Department has argued that under Chinese ownership, TikTok poses a security risk due to its access to Americans’ extensive personal data, potentially allowing China to manipulate the information consumed by Americans through TikTok covertly.
Legal and International Reactions
Attorney General Merrick Garland lauded the decision as crucial in preventing the Chinese government from exploiting TikTok. Conversely, the Chinese Embassy in Washington criticized the law as a stark act of commercial robbery, cautioning the U.S. to handle the matter cautiously to avoid damaging bilateral relations and mutual trust between the two nations.
Read: US Government Defends Law Mandating Sale of TikTok App
This ruling arises amidst escalating trade tensions, with recent restrictions placed by President Joe Biden’s administration on China’s chip industry and China’s retaliatory ban on exports of certain materials to the U.S.
Judicial Outcomes and Further Actions
U.S. appeals court Judges Sri Srinivasan, Neomi Rao, and Douglas Ginsburg dismissed legal challenges from TikTok and its users against the law, which sets a deadline of January 19 for ByteDance to sell or divest TikTok’s U.S. assets. TikTok plans to appeal the decision to the Supreme Court.
BREAKING: A federal appeals court has rejected TikTok's bid to overturn a law banning the platform unless the company finds a new owner.
TikTok and ByteDance are expected to appeal to the Supreme Court.
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— ABC News (@ABC) December 6, 2024TikTok CEO Shou Zi Chew expressed disappointment in the ruling but assured that the platform’s fight to protect free speech would continue. The American Civil Liberties Union also criticized the ban, claiming it blatantly violates the First Amendment rights of millions of Americans who use the app for expression and communication.
Read: US House Passes Bill Mandating Sale of TikTok by ByteDance
The court maintained that China’s potential to distort U.S. discourse through TikTok threatens the fundamentals of free speech, noting that the First Amendment would prevent similar domestic government control over a social media company in the U.S.
Impending Decisions and Economic Impact
Unless overturned by the Supreme Court, the fate of TikTok now rests with President Biden, who must decide whether to grant a 90-day extension to the January 19 deadline. This decision will subsequently be inherited by President-elect Donald Trump, who assumes office on January 20. Trump previously attempted to ban TikTok during his first term and indicated before the November presidential election that he would oppose the ban.
The law also grants the U.S. government broad authority to ban other foreign-owned apps that raise data collection concerns, potentially paving the way for more widespread actions against foreign tech entities. Following the court’s decision, shares of Meta Platforms and Google’s parent company, Alphabet, increased, reflecting the potential shift in the online advertising market if TikTok is banned.
