US court upholds TikTok law forcing its sale

WASHINGTON,— A federal appeals court has upheld a law requiring ByteDance, the Chinese owner of TikTok, to sell its U.S. operations by January 19, 2024, or face an outright ban on the platform. The ruling, announced Friday, marks a significant victory for the U.S. government, which has expressed concerns over national security risks tied to the app’s Chinese ownership.

The decision intensifies the possibility of TikTok being banned in the United States, where the app is used by an estimated 170 million people. The case is likely to be taken up by the Supreme Court on appeal.

Critics of the ruling, including free speech advocates, have raised alarms. Patrick Toomey, deputy director of the American Civil Liberties Union’s National Security Project, described the ruling as a “flawed and dangerous precedent.”

He further stated, “Banning TikTok directly infringes on the First Amendment rights of millions of Americans who rely on the app for expression and global communication.”

However, the appeals court argued that the legislation resulted from extensive bipartisan efforts in Congress and multiple administrations. Judges Sri Srinivasan, Neomi Rao, and Douglas Ginsburg stated that the law specifically targets foreign control deemed a national security threat, particularly from the People’s Republic of China.

TikTok has maintained that it poses no security threat and has vowed to challenge the ruling. In a statement, the company said, “The Supreme Court has a strong history of protecting free speech, and we are confident it will uphold Americans’ constitutional rights.” TikTok has condemned the law, calling it a blatant form of “censorship against the American people.”

The Justice Department has yet to comment on the ruling, but officials have previously cited concerns that TikTok’s Chinese ownership allows access to vast amounts of U.S. user data.

They argue this data could be exploited by the Chinese government for espionage or influence campaigns. TikTok has repeatedly denied these claims, insisting that its U.S. user data is stored securely and not shared with Beijing.

The ruling grants the Biden administration the power to extend the divestiture deadline by 90 days, though it is unclear if the White House will do so. The decision also leaves the incoming administration of President-elect Donald Trump, who takes office the day after the current deadline, with significant authority over TikTok’s future.

This ruling is not the first attempt to restrict TikTok in the U.S. Former President Trump tried unsuccessfully to ban the app in 2020, along with WeChat, owned by Tencent. Those efforts were blocked by courts at the time.

The impact of the decision has already rippled through the tech industry. Shares of TikTok competitors saw gains following the announcement. Meta, owner of Facebook and Instagram, hit record highs, closing over 3% up. Shares of Alphabet, YouTube’s parent company and a competitor to TikTok, climbed by more than 1%.

Judge Ginsburg, who authored the opinion, acknowledged the significance of the ruling. He noted that while the app serves as a major platform for free expression, Congress and successive presidents determined that addressing its ownership was crucial for national security.

“The decision was made after careful consideration and in line with regulatory practices, with no intention to suppress particular messages or ideas,” Ginsburg wrote.

If ByteDance does not comply by January 19, app stores like Apple’s and Google’s will be required to remove TikTok from their platforms.

Hosting services would also be barred from supporting the app. ByteDance, whose investors include Sequoia Capital and KKR, was valued at $268 billion last year, but the company faces significant challenges meeting the divestiture demands within the tight timeframe.

The legal battle over TikTok’s future underscores broader tensions between the U.S. and China over technology and data security, with both sides keeping a close eye on the next steps in this high-stakes case.

(With files from Reuters)