May 09, 2024
TikTok has sued the US government over a law that would force its Chinese parent company ByteDance to sell the app or face a ban. The law, signed by President Biden in April, gives ByteDance nine months to find a buyer, with a possible three-month extension.
TikTok argues that the law violates the First Amendment and that distribution is not commercially, technologically, or legally possible.
The US government has long expressed concerns about foreign ownership of TikTok, citing national security risks. Despite TikTok's efforts to address these concerns, spending more than $2 billion on a data protection initiative called "Project Texas," lawmakers continue to push for a ban, as reported by CNBC.
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The case, filed in the U.S. Court of Appeals for the D.C. Circuit, will likely depend on whether the courts view the issue as a First Amendment issue or a national security concern.
Experts say the case could end up in the US Supreme Court, with TikTok seeking a preliminary injunction to block the law or hold the law pending a ruling.
If the court doesn't grant a stay, it could be a bad sign for TikTok and ByteDance. The company could also file another lawsuit on behalf of its customers, strengthening its First Amendment argument.
TikTok's potential sales are complicated by its algorithm problem, which is key to the app's functionality. China would likely need to approve the transfer of the algorithm, which experts say is unlikely.
