TikTok pushes back on Trump in court even as it angles for deal

Bloomberg September 24 | Updated on September 24, 2020 Published on September 24, 2020

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Chinese owner ByteDance seeks to block President’s US ban

TikTok’s Chinese owner asked a federal judge to stop President Donald Trump from enforcing a ban that would remove the viral video-sharing network from US app stores this weekend.

ByteDance Ltd. filed on Wednesday for a temporary block on the ban even as it continues to pursue approvals from the Trump administration for a sale of its US operations to Oracle Corp. and Walmart Inc. Its request deploys many of the same arguments a group of WeChat users made to win their own preliminary injunction last weekend against a similar ban.

Both TikTok and WeChat, which is owned by China’s Tencent Holdings Ltd., have been labeled national security threats by the Trump administration, which is seeking to stop their use in the US -- or, in TikTok’s case, force a sale to U.S. companies -- on the grounds that they could allow the Chinese government to gain access to the personal data of millions of Americans.

‘Clean Network’ guidance

The TikTok ban, proclaimed in an August 6 executive order by the president, is part of a wider effort by the Trump administration to take a hard line against Beijing, betting that a tough approach will help win the president re-election. Secretary of State Michael Pompeo has urged US companies to bar Chinese applications as part of his “Clean Network” guidance.

Also read: ByteDance seeks China approval to export TikTok technology

Ticking ClockByteDance’s preliminary-injunction request challenges new Commerce Department rules that would remove TikTok from app stores and require changes to the viral network’s core functionality that the company says would effectively shut it down in the US by mid-November. ByteDance asked the Washington court to set a hearing on its request before the rules take effect at 11:59 p.m. on September 27 and proposed that both sides file additional briefs this week.

Filing in response, the US said “there is no need for the parties (or for this court) to conduct emergency proceedings and wade into sensitive issues of national security and foreign policy on the basis of a limited record prepared on an extremely short time frame.”

Also read: Beijing unlikely to approve ByteDance’s TikTok deal with Oracle

Justice Department spokeswoman Mollie Timmons declined to comment on whether the department would challenge the injunction. The Commerce Department didn’t immediately respond to a request for comment.

ByteDance argues that the TikTok ban exceeds the Trump administration’s legal authority. Its filing echoes a number of the arguments made by WeChat, which said a ban would the ban infringe on its First Amendment rights and cause irreparable harm to the company.

‘Irreparable harm’

TikTok has “made extraordinary efforts to try to satisfy the government’s ever-shifting demands and purported national security concerns,” ByteDance said in its filing. “In the absence of preliminary injunctive relief, the August 6 order and the prohibitions will cause plaintiffs irreparable harm.”

Also read: ByteDance, Oracle at loggerheads over terms of TikTok agreement

Trump has given his conditional blessing to the plan for Oracle and Walmart to take a stake in TikTok, but the arrangement is by no means final. The Committee on Foreign Investment in the U.S. still needs to sign off, as do officials in China, where the state-run news media have denounced the plan as “an American trap” and an “underhanded trick.”

There are also significant disagreements over the specifics of the deal. ByteDance says it plans to retain 80 per cent of TikTok Global, the new company that would result from the deal. Oracle says the company will be mostly owned by US entities and that ByteDance “will have no ownership,” according to The Wall Street Journal.

A;lso read: ‘China has no reason to approve ‘dirty’ TikTok deal’

US District Judge Carl Nichols set a hearing for 10 a.m. on Thursday to discuss the scheduling dispute.

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Published on September 24, 2020
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