TikTok Loses Appeal to Block Forced Sale of US Operations

WASHINGTON — The days appear to be numbered for TikTok in the United States after a Washington, D.C., federal appeals court’s decision Friday that would force a sale of the social media giant.

The court’s decision upholds a law signed by President Joe Biden in April intended to compel the popular social media site to divest from control by ByteDance, its parent company owned partly by the Chinese government.

Rather than divest, TikTok sued, claiming the law was an unconstitutional intrusion into its free speech rights.

It also denied allegations of Chinese government influence that might intrude into the privacy of Americans through secretive surveillance.

TikTok argued in its petition for appeal that a forced sale “is simply not possible: not commercially, not technologically, not legally.” 

An attorney for TikTok said requiring Chinese divestiture would be a free speech violation as much as banning books by foreign authors.

The U.S. Circuit Court of Appeals disagreed, which means TikTok must sell its U.S. assets by Jan. 19.

“The First Amendment exists to protect free speech in the United States,” the majority opinion said. “Here 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 United States.”

TikTok might have one more legal option but only if the Supreme Court grants its emergency appeal. TikTok’s lawyers have said they plan to appeal.

The Supreme Court could decide whether to uphold the circuit court decision or delay enforcement of the forced sale beyond Jan. 19 until there is a new hearing.

Congress became concerned about TikTok’s U.S. operations after users complained about possible censorship that favored China. Short form videos commending China and its political policies could be found on the site but rarely anything critical of the Chinese Communist Party.

Further investigation showed that parent company ByteDance established an internal Chinese Communist Party committee in 2014 that sought to “transmit the correct political direction, public opinion guidance and value orientation into every business and product line.”

The company went live with TikTok in 2017, the same year the Chinese government approved its National Intelligence Law. The law contains a provision that says all Chinese organizations and citizens shall “support, assist and cooperate with national intelligence efforts.”

During a March 23, 2023 congressional hearing, TikTok chief executive Shou Chew said his company’s U.S. operations were separate from any Chinese influence.

“We do not promote or remove content at the request of the Chinese government,” Chew said. 

Cybersecurity experts testified TikTok and ByteDance could use internet URLs to identify American visitors to the site as well as to track their online searches. They described the potential Chinese access to the private data as a national security risk.

Their warnings about privacy intrusions, as well as Chinese government connections with ByteDance, led Congress to approve the law now requiring a forced sale of TikTok’s U.S. operations. It is called the Protecting Americans from Foreign Adversary Controlled Applications Act.

The Chinese government warned that if TikTok is sold, it would not allow its algorithm that tailors content recommendations to each user to be acquired by the purchaser.

The new owners would need to rebuild the algorithm, which TikTok’s lawyers said “is not remotely feasible.”

“The platform consists of millions of lines of software code that have been painstakingly developed by thousands of engineers over multiple years,” their petition to the appellate court said. 

The lead case is TikTok Inc. et al. v. Merrick Garland in the U.S. Court of Appeals for the District of Columbia Circuit.

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