Supreme Court Signals It’s Likely to Uphold TikTok Ban in US (3)

The Supreme Court signaled it’s likely to uphold a law that would ban the popular TikTok social media platform in the US if it isn’t sold by its Chinese parent company by Jan. 19.

Hearing arguments in Washington, a majority of justices suggested they see US national security concerns as overriding the free speech interests of the companies and content creators. Several justices cast the law as being focused not on speech, but on ByteDance Ltd., the parent company that Congress concluded has dangerously close ties with China’s Communist government.

“Are we supposed to ignore the fact that the ultimate parent is in fact subject to doing intelligence work for the Chinese government?” Chief Justice John Roberts asked TikTok’s lawyer during a session that lasted more than 2 1/2 hours Friday.

TikTok Hearing at US Supreme Court: TOPLive Transcript

A decision upholding the ban would open a tumultuous period for TikTok, ByteDance and the video-sharing app’s 170 million US users. ByteDance so far has insisted it won’t consider a sale, but the company could revisit that stance if a ban is imminent.

The law applies to technology companies — including Apple Inc., Oracle Corp. and Alphabet Inc.’s Google — that host and distribute TikTok, threatening them with potentially massive fines if they continue to do so. The platform wouldn’t immediately disappear for users, but because it will no longer be updated, its performance in all likelihood would slowly deteriorate.

‘Huge Concern’

The Biden administration is defending the law as a national security imperative, saying that Chinese control of TikTok will let a foreign adversary spread propaganda, covertly manipulate the platform and collect Americans’ data for espionage or blackmail purposes.

“Just on the data collection, that seems like a huge concern for the future of the country,” Justice Brett Kavanaugh said to TikTok’s lawyer, Noel Francisco.

President Joe Biden signed the measure into law in April after it won approval from a bipartisan majority in Congress.

TikTok and ByteDance say lawmakers gave short shrift to speech rights. The companies contend that foreign influence concerns are unfounded, arguing that TikTok Inc. is an American company incorporated and headquartered in California.

A group of content creators is also urging the court to strike down the law, saying a ban would strip millions of Americans of their ability to speak to and hear from communities they have come to value.

Justice Clarence Thomas voiced skepticism toward those arguments.

The law “doesn’t say anything about creators or people who use the site,” he said. “It’s only concerned about the ownership and the concerns that data will be manipulated or there will be other national security problems with someone who’s not a citizen of this country or a company who’s not here.”

Only Justice Neil Gorsuch indicated he was a likely vote to strike down the law. Gorsuch called the government’s defense of the law “paternalistic” and asked why Congress couldn’t have just required TikTok to post a warning telling users about the risk of Chinese manipulation.

“Don’t we normally assume that the best remedy for problematic speech is counter-speech?” he asked US Solicitor General Elizabeth Prelogar, the administration’s top Supreme Court lawyer.

Matthew Schettenhelm, an analyst for Bloomberg Intelligence, lowered the chance of a TikTok win to 20% from 30% after the argument.

Going Dark

Much of the argument concerned what would happen should the law kick in as scheduled.

Francisco, TikTok’s lawyer, said the platform would “go dark” at that point. “Essentially the platform shuts down,” he said.

But Prelogar, the solicitor general, said the ban would end as soon as ByteDance sells the platform in a way that meets the law’s requirements

“When push comes to shove and these restrictions take effect, I think it will fundamentally change the landscape with respect to what ByteDance is willing to consider,” she said.

The Jan. 20 presidential inauguration of Donald Trump will add a new element. Trump, who once supported a ban but now says he opposes it, asked the Supreme Court last month to take the unorthodox step of blocking the law so he can broker a settlement.

Trump’s Justice Department would have authority to enforce the law, and as president he would have power to approve any divestment proposal and potentially block the law in the meantime.

Company Risk

Queried by Kavanaugh, Prelogar said Trump could choose not to enforce the law. But Kavanaugh then questioned whether Oracle, Apple and other companies subject to the law would continue providing services for TikTok in that scenario.

“They’re not going to take that risk unless they have the assurance that a presidential statement of nonenforcement is in fact something that can be fully relied on because the risk is too severe otherwise, right?” Kavanaugh asked.

Prelogar said the companies might have “a sufficient safeguard here to allow them to continue to operate.”

Justice Samuel Alito suggested the court could issue an “administrative stay” of the effective date, but no other justice indicated interest in that idea.

The Supreme Court put the case on a fast track after TikTok and the content creators asked for the ban to be put on hold temporarily. The justices instead scheduled a special session that gives them time to issue a definitive ruling on the law’s constitutionality before Jan. 19.

The court could also issue an interim order — saying whether the law can take effect on Jan. 19 — while giving itself more time to rule on the merits of the case with a full opinion.

The cases are TikTok v. Garland, 24-656, and Firebaugh v. Garland, 24-657.

(Updates with discussion of how law would work starting in 16th paragraph.)

--With assistance from Alexandra S. Levine, Sabrina Willmer and Emily Birnbaum.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Steve Stroth

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