TikTok Sues Trump to Challenge U.S. Government Restrictions (3)

TikTok asked a federal judge to block the Trump administration from enacting a ban on the fast-growing social media network, bringing a geopolitical fight over technology and trade into a U.S. courtroom.

TikTok and its Chinese parent, ByteDance Ltd., sued on Monday in federal court in Los Angeles to challenge an Aug. 6 order from President Donald Trump prohibiting U.S. residents from doing business with TikTok. Trump says TikTok is a security risk for user data. The company said the president’s decision was made “for political reasons,” is unconstitutional and violates rights to due process.

While the order doesn’t take effect for weeks, it has escalated tensions between the U.S. and China. On Aug. 14, Trump ordered ByteDance to sell its U.S. assets and said the U.S. should receive a cut of the proceeds. Microsoft Corp. and Oracle Corp. have already shown interest in buying TikTok, which argues it poses no security threat.

Trump’s actions would “destroy an online community where millions of Americans have come together to express themselves, share video content, and make connections with each other,” TikTok said. “The president has taken plaintiffs’ property without compensation.”

The White House did not comment on the lawsuit.

TikTok, a platform for creating and sharing short videos, has grown rapidly in the U.S. from about 11 million monthly active users in January 2018 to 100 million today, according to the filing. Global usage has risen to almost 2 billion from 55 million in January 2018, it said.

TikTok has sought to distance itself from China and pushed back on the argument that it presents a threat to user data. In the lawsuit, the company said it has “taken extraordinary measures to protect the privacy and security of TikTok’s U.S. user data.”

Those moves included storing data in the U.S. and Singapore, segregating TikTok data from other ByteDance offerings and appointing a U.S. leadership and content moderation team that is “not subject to Chinese law.”

Read More: Why Tencent and WeChat Are Such a Big Deal in China

Trump’s decision to force the sale of ByteDance’s U.S. assets was based on an investigation by the Committee on Foreign Investment in the U.S. Decisions by the interagency panel, which is led by the Treasury Department, are all but impossible to overturn in court.

TikTok and ByteDance said in the lawsuit that they provided the committee with “voluminous documentation,” including about security measures. Yet the administration “ignored” the information, and the committee “repeatedly refused to engage with ByteDance and its counsel about CFIUS’s concerns,” TikTok said.

The suit comes as Trump steps up his campaign against China, betting it will help him win November’s election despite upsetting millions of younger TikTok users. Secretary of State Michael Pompeo has urged American companies to bar Chinese applications from their app stores, part of his “Clean Network” guidance designed to prevent authorities in China from accessing the personal data of U.S. citizens.

TikTok suggested that Trump’s actions amounted to payback against the network for providing a platform for those who oppose him. It cited an incident in June, when TikTok users claimed they coordinated mass ticket reservations and inflated projected attendance for a Trump rally in Tulsa, Oklahoma, so that many of the seats ended up empty. Trump’s re-election campaign has recently run online advertisements targeting the network, asking supporters to “sign the petition now to ban TikTok.”

Trump made his move under the International Emergency Economic Powers Act, a 1977 law that allows the president to declare a national emergency in response to an “unusual and extraordinary threat,” which authorizes him to block transactions and seize assets.

Uphill Fight

The legal challenge faces an uphill fight, according to James Dempsey, executive director of the Berkeley Center for Law and Technology at the University of California, Berkeley. Courts don’t generally review the president’s determinations on questions of national security, Dempsey said.

But the company may be successful with a due process argument, Dempsey said.

“If there were ever a case to challenge the president on using national security powers without an adequate basis, this may be the one,” he said. “A First Amendment challenge is also possible, but TikTok will have to establish that it has a First Amendment right to be on the phones of Americans or that TikTok is a publisher, separate from the First Amendment rights of its users.”

Read More: Why Trump Is Threatening Your Teen’s Favorite App

Trump has threatened penalties on any U.S. resident or company that conducts transactions with TikTok or WeChat, a popular Chinese messaging app, saying that having Americans’ personal data exposed to China creates a national security risk. The apps could get bumped off Apple Inc.’s and Google’s app stores.

“This executive order risks undermining global businesses’ trust in the United States’ commitment to the rule of law, which has served as a magnet for investment and spurred decades of American economic growth,” TikTok said in a statement hours after Trump’s order was issued. “And it sets a dangerous precedent for the concept of free expression and open markets.”

A TikTok employee joined the fight on Monday, saying the government action would unconstitutionally deprive him of a job. Patrick Ryan filed a lawsuit in federal court in San Francisco, hours after the company filed its own constitutional challenge in federal court in Los Angeles.

On Friday, a group of WeChat users sued in San Francisco federal court saying Trump’s ban on the messaging app violated their right of free speech and due process rights because it doesn’t provide notice of the specific conduct that’s prohibited.

The case is TikTok v. Donald Trump, 20-cv-7672, U.S. District Court, Central District of California (Los Angeles).

(Updates with separate lawsuit by TikTok employees, growth of TikTok user base.)

--With assistance from Shelly Banjo, Sara Forden, Kurt Wagner, David McLaughlin and Jordan Fabian.

To contact the reporters on this story:
Edvard Pettersson in Los Angeles at epettersson@bloomberg.net;
David Glovin in New York at dglovin@bloomberg.net;
Ben Brody in Washington, D.C. at btenerellabr@bloomberg.net

To contact the editors responsible for this story:
David Glovin at dglovin@bloomberg.net

Steve Stroth

© 2020 Bloomberg L.P. All rights reserved. Used with permission.