Appeals Court Dismisses TikTok’s Petition Of Overturning The Law

Appeals Court dismisses TikTok’s petition of overturning the law

The US Court of Appeals for the District of Columbia Circuit has rejected the petition of TikTok to overturn the law, requiring the company to break ties with its China-based parent company ByteDance or be banned by mid-January. Judge Douglas Ginsburg explained, "The First Amendment protects free speech in the United States. The government acted solely to protect that freedom from a foreign adversary nation and to limit that adversary's ability to gather data on people in the country.”

TikTok and ByteDance, another plaintiff in the lawsuit, are expected to appeal to the Supreme Court.

Meanwhile, President-elect Donald Trump, who tried to ban TikTok during his first term and the Department of Justice (DoJ) will have to enforce the law. Trump is, however, now against a TikTok ban and might work to ‘save’ the social media platform.

The ruling came after the appeals court panel, comprising two Republican and one Democrat-appointed judges, heard the oral arguments in September. The three judges denied TikTok's petition.

Judge Sri Srinivasan, the chief judge, appointed by former President Barack Obama, issued a concurring opinion. The law, signed by President Joe Biden in April, was the culmination of a years-long saga in Washington over the short-form video-sharing app, which the government sees as a national security threat due to its connections to China.

The US showed concerns about TikTok collecting user data, including sensitive information on viewing habits, that could fall into the hands of the Chinese government through coercion. Officials have warned that the proprietary algorithm that fuels what users see on the app, is vulnerable to manipulation by Chinese authorities, who can use it to shape content on the platform that's difficult to detect a concern mirrored by the European Union, even as it scrutinizes the video-sharing app's role in the Romanian elections.

However, a significant portion of the government's information in the case has been redacted and hidden from the public and the two companies. TikTok had sued the government over the law in May and denied it could be used by Beijing to spy on or manipulate Americans. Its attorneys pointed out that the US did not provide evidence to show that the company handed over user data to the Chinese government or manipulated content for Beijing's benefit. They added that the law was predicated on future risks, which the Justice Department emphasized pointing in part to unspecified action the two companies earlier took due to the Chinese government’s demands.

After the recent hearing, legal experts said it was challenging to note how the three judges would rule.

The panel contemplated how TikTok's foreign ownership affected its rights under the Constitution and how far the government could go to curtail potential influence from abroad on a foreign-owned platform.

The judges pressed Daniel Tenny, a DoJ attorney, on the implications the case could have on the First Amendment. They were also skeptical of TikTok's arguments, challenging the company's attorney Andrew Pincus on whether the rights preclude the government from curtailing a powerful company subject to the laws and influence of a foreign adversary.

On TikTok's ownership, the judges cited wartime precedent that allows the US to restrict foreign ownership of broadcast licenses. They asked if TikTok’s arguments would apply if the US was engaged in war.

Meanwhile, TikTok claims to have invested over $2 billion to bolster protections around US user data. It argued that the government's broader concerns could have been resolved in a draft agreement it provided to the Biden administration over two years ago. It blamed the government for walking away from further negotiations.

However, the Justice Department said it was deficient. The attorneys for the two companies stated it was impossible to divest the platform commercially and technologically. Any sale of TikTok without the coveted algorithm, the platform's secret that the Chinese authorities would likely block under any divesture plan, would turn TikTok’s US version into an island disconnected from other global content. Investors, including Trump's former Treasury Secretary Steven Mnuchin and billionaire Frank McCourt, have expressed interest in purchasing the platform. Early this year, both said they were launching a consortium to purchase TikTok's US business. Recently, a spokesperson for McCourt's Project Liberty initiative, which protects online privacy, said that unnamed participants in their bid made informal commitments of over $20 billion.

TikTok's lawsuit was merged with a second legal challenge by several content creators and the legal costs are being covered by TikTok. The third suit was filed on behalf of conservative creators working with a non-profit Based Politics Inc.

If TikTok appeals and the courts keep upholding the law, it would fall on Trump's administration to enforce it and fine it for potential violations. The penalties would apply to app stores, prohibiting them from offering TikTok and barring its supportive internet-hosting services.