The fate of ByteDance-owned TikTok in the US rests in the hands of the Supreme Court and Donald Trump, who has promised to “save” the app as a potential ban in the country next year looks more possible.
The US Court of Appeals for the District of Columbia Circuit on Friday upheld a law requiring China’s ByteDance to sell the short form video platform or face a US ban by January 19 2025 — the day before Trump takes over from Joe Biden as US president.
TikTok is expected to pursue a legal appeal. If unsuccessful, the app could be banned in the US for a day before Trump takes office, in a blow to the app’s 170mn American users and the creators and marketers that rely on the platform. It would then be up to the new president to find a way to convince Congress to reverse the same law it passed with overwhelming bipartisan support this year — or find another avenue to do so himself.
“The whole thing is going to be a down-to-the-wire mess,” said Alan Rozenshtein, a law professor at the University of Minnesota Law School.
What will TikTok do next?
TikTok is likely to exhaust every judicial avenue to get the law overturned. A first step would be to seek further review by the Washington appeals court or take it directly to the US Supreme Court, which would have to agree to hear the case. If so, the platform will also likely seek a court order to temporarily stop the law from coming into effect on January 19.
TikTok on Friday said: “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.”
America’s highest court has “signalled that entities operating platforms have First Amendment interests”, said Aziz Huq, professor at the University of Chicago Law School. But it has also been “open to freedom of speech limits in the context of national security”.
What can Trump do?
Short of a legal victory, TikTok’s survival will probably rest in Trump’s hands. Before his election, he said he would not ban the app upon his return to the White House, in an attempt to preserve “competition” in a market dominated by Mark Zuckerberg’s Meta, which the president-elect has described as an “enemy of the people”.
It is unlikely Trump would have the legal authority as president to unilaterally stop the law. He could ask Congress — where both houses will be controlled by his fellow Republicans — to repeal the law. He could also press his new attorney-general not to enforce it, while reassuring Apple and Google that they will not be punished if they continue to support the app on their app stores.
Rozenshtein noted the law allows TikTok to continue if the president determines that the app is no longer under Chinese control — arguing Trump could simply declare this is the case.
Would ByteDance sell TikTok?
The clearest way for TikTok to avoid a ban is through a sale that separates the app and its US user data from its Chinese parent company. TikTok has argued that the January 19 deadline is too tight for a sale given its complex integration with ByteDance. But the appellate court on Friday disagreed, saying it was a “substantial amount of time”.
A sale would also be difficult from a regulatory perspective, and could provoke backlash from Chinese officials and the public. After the law passed in April, ByteDance said it had no intention of selling the business.
In 2020, China updated its export control rules that in effect give Beijing a say in any deal that would sell Chinese technology to an American buyer. Last year, China’s commerce ministry said it would “firmly oppose” a forced sale of TikTok.
Regardless, some buyers have been circling. Frank McCourt, an American media and sports businessman, has established a consortium of investors that would bid for TikTok through his non-profit entity, Project Liberty, which was set up in 2021 to advocate for a more equitable internet. A spokesperson this week said its investor group had made informal commitments of more than $20bn of capital.
Likewise, former Treasury secretary Steven Mnuchin in May said he was putting together an investor group to try to buy the app, while Rumble, a right-wing social media platform, in March said it would participate in a consortium to acquire TikTok.
Software group Oracle struck a deal with TikTok in 2020 known as Project Texas to store the personal data of American users in the US, but it is unlikely to acquire the app wholesale. TikTok began to move US data to Oracle Cloud in 2022.
What does it mean for US-China relations?
The US TikTok ban has been seen as one of the latest signs that US-China relations are on a downward trajectory, and of the widespread lack of trust in Chinese companies operating in the US. Trade tensions had risen this week after the US issued another crackdown on China’s chip industry, its third in three years.
Proponents of a ban have expressed concerns the Chinese Communist party may access TikTok’s user data or control its algorithm to target disinformation — although the US government has not presented evidence the app has been misused. TikTok said it would not comply with an attempt to exert power over it in this way.
Craig Singleton, a China expert at the Foundation for Defense of Democracies, said the court ruling was a “symbolic and strategic loss” for China in the broader tech competition with Washington, calling it a “powerful tool” for influence and data collection in the US.
Chinese authorities could retaliate to the US banning TikTok via political means such as issuing harsher export controls — for instance, on minerals that are crucial components of making computer chips — or by outright blocking any sale, citing national security concerns and fair competition.
The impact of the US court ruling on bilateral relations will depend on whether Trump seeks to de-escalate competitive tensions with China over the app when he becomes president again.
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