TikTok is putting their money where their mouth is and is challenging Trump’s executive order. The order gave owner ByteDance 45 days – now extended to 90 days – to divest TikTok’s US operations. On Monday, TikTok filed a lawsuit in California’s federal court.
“We Have No Choice”
The rumor that TikTok was going to take legal action against President Trump’s executive order had been circulating for some time. First came the ban, next the Whitehouse gave tech giant Microsoft the nod of approval to buy TikTok. This announcement came with a harsh warning, namely that the president would still ban the app if no US buyer could be found before September 15. This deadline has now been extended to 12 November.
On Monday, TikTok explained in a blog post why they were suing the president’s administration. The company underlines their extensive efforts to address the Administration’s concerns, even when they “disagreed with the concerns themselves”. These efforts have included the erection of software barriers to help ensure that US user data is stored separately; US user data has been stored outside of China, namely in the United States and Singapore; and key personnel, including TikTok’s CEO, Global Chief Security Officer, and General Counsel in the US, are all Americans based in the US. Furthermore, the company employs more than 1500 personnel across the US, with 10,000 more jobs planned. 100 million people in the US use TikTok regularly.
“We have a thriving community and we are grateful – and responsible – to them”, declared TikTok in their blogpost. “The Executive Order issued by the Administration on August 6, 2020 has the potential to strip the rights of that community without any evidence to justify such an extreme action, and without any due process […] We do not take suing the government lightly, however we feel we have no choice but to take action to protect our rights, and the rights of our community and employees.”
A Threat to National Security
Things have not been going smoothly between President Trump and TikTok for quite some time. According to the president, the app poses a threat to the national security of his country and could share American citizens’ personal information with the Chinese Communist Party. In addition, the president states that the Chinese government could oblige companies to forward this type of data to them. This is seen as a serious privacy concern.
The Federal Trade Commission (FTC) and the Committee on Foreign Investment in the United States (CFIUS), a research institute that investigates, among other things, major acquisitions by US companies, share the president’s view. In 2019, CFIUS contacted parent company ByteDance asking them to consider whether to review its acquisition of Musical.ly. “This review was highly unusual in that ByteDance had acquired Musical.ly two years earlier in 2017”, TikTok said.
Nonetheless, TikTok claims that they provided voluminous amounts of documentation and information in response to CFIUS’s questions, but that CFIUS never articulated any reason why TikTok’s security measures were inadequate. Furthermore, TikTok states that the CFIUS refused to engage further with ByteDance about their concerns or to help them identify mitigation measures that would address potential risks. Before signing the order, Trump commented that banning TikTok was “one of the many options” he’s considering to “punish China over the coronavirus”.
Constructive Dialogue the Preferred Option
Trump’s actions have put TikTok in a very difficult position. The company faces the possibility of being shut down in the US or potentially being sold to a US buyer. Microsoft acknowledged early this month that they were interested in buying TikTok’s operations in the US, Canada, Australia, and New Zealand. In mid-August, Oracle partnered with current ByteDance investors, General Atlantic and Sequoia Capital, to join the bidding game. Twitter is also interested, but their chances are seen as slim, because of their smaller size and antitrust concerns.
TikTok, however, is not ready to draw the short straw, which is what a forced sale represents. And yet, in spite all, their wish is still to restart the conversation. “To be clear, we far prefer constructive dialogue over litigation […] We will continue the work we have long been undertaking to earn the trust of our full US community.”
As part of their transparency efforts, TikTok has built a transparency center to provide users and outside experts with more information. “Our Transparency and Accountability Center, for example, is central among those ongoing efforts as an industry-leading step to build trust and understanding of our moderation policies, source code, and data practices. Our legal challenge is a protection to ensure that these efforts can take place without the threat of an unwarranted ban hovering like a dark cloud over the joy and creativity of our community.”