TikTok and ByteDance sued to challenge a bill seeking the sale or ban of the app in the US.
The businesses filed a lawsuit in the U.S. Court of Appeals for the District of Columbia Circuit, arguing that the law is unconstitutional for different reasons, including a violation of the First Amendment's right to free speech. Biden signed a bill on April 24. ByteDance has until January 19 to sell TikTok, or it may be banned. The companies complained about Congress passing a law that permanently bans a single designated speech platform nationwide, something that has never happened before.
The White House wants to stop Chinese ownership of TikTok for national security concerns, but not to ban it completely. The Justice Department and the White House have not commented on the complaint. TikTok is trying to prevent its shutdown in the US, while other companies are taking advantage of TikTok's uncertainty to attract advertisers.
Congress quickly passed the legislation with strong support because of concerns about China using TikTok to access American data or spy on US politicians. TikTok has denied sharing user data from US citizens and criticized lawmakers for their "speculative" concerns. Representative Raja Krishnamoorthi, a leading Democrat, thinks the law is needed to tackle the national security risk from ByteDance-owned apps like TikTok.
Internet hosting companies are not allowed to support TikTok, and app stores like Apple and Alphabet's Google cannot sell TikTok until ByteDance divests it by January 19. The complaint says that the Chinese government has clearly stated that it will not allow the recommendation engine, which is crucial for TikTok's success in the US, to be sold off. Based on their argument that "prospective injunctive relief" is required, the firms have petitioned the D.C. Circuit to stop U.S. Attorney General Merrick Garland from carrying out the legislation.
The lawsuit claims that global institutional investors, such as BlackRock, General Atlantic, and Susquehanna International Group, own 58% of ByteDance. The company's Chinese founder owns 21%, and the remaining 21% is owned by its employees, who include roughly 7,000 Americans.
