Facing Sale Or Ban, TikTok Tossed Under National Security Bus By Appeals Court

A US federal appeals court has rejected a challenge to the law that prevents popular apps that collect data on Americans from being controlled by a foreign adversary.

The decision puts the ongoing operation of social media network TikTok, a subsidiary of China-based ByteDance, at risk.

Unless the ruling is reversed on appeal, ByteDance divests, or the White House intervenes, TikTok will be forced to stop operating in the US as soon as January 19, 2025. The President – Biden until January 20, 2025 – has the option to grant a one-time 90-day extension to this deadline.

The law at issue, initially known as the Protecting Americans from Foreign Adversary Controlled Applications Act (PFACAA), became part of the foreign assistance package passed in April, after which it was approved by President Biden. It limits foreign adversaries from collecting data through adversary-controlled software applications. It also identifies ByteDance and TikTok by name, while potentially applying to code controlled by other foreign entities.

For years, US officials have warned that TikTok has the potential to be used to spy on Americans. In March, then head of NSA Cybersecurity Rob Joyce called TikTok China's "Trojan horse."

More recently, US authorities have alleged active data gathering. The US Justice Department in a July court filing accused ByteDance and TikTok of using an internal tool called Lark to allow TikTok employees in the US to communicate with ByteDance engineers in China and provide them with US users' sensitive personal information.

ByteDance, incorporated in the Cayman Islands but headquartered in China, challenged the constitutionality of the law in May.

"Banning TikTok is so obviously unconstitutional, in fact, that even the act’s sponsors recognized that reality, and therefore have tried mightily to depict the law not as a ban at all, but merely a regulation of TikTok’s ownership," the companies said in their lawsuit [PDF].

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On Friday, a three-judge panel for the US Court of Appeals for the District of Columbia Circuit unanimously disagreed, finding the Justice Department's national security argument valid.

"The government provides persuasive support for its concerns regarding the threat posed by the PRC [People's Republic of China] in general and through the TikTok platform in particular," the appellate ruling [PDF] says, noting that the objections raised by ByteDance and TikTok are insufficient.

"[T]he bottom line is that they fail to overcome the government’s considered judgment and the deference we owe that judgment," the ruling says.

ByteDance and TikTok intend to appeal to the US Supreme Court.

"The Supreme Court has an established historical record of protecting Americans' right to free speech, and we expect they will do just that on this important constitutional issue," said TikTok spokesperson Michael Hughes in a statement provided to The Register.

"Unfortunately, the TikTok ban was conceived and pushed through based upon inaccurate, flawed and hypothetical information, resulting in outright censorship of the American people. The TikTok ban, unless stopped, will silence the voices of over 170 million Americans here in the US and around the world on January 19, 2025."

TikTok could get a reprieve from the incoming administration, however. President-elect Trump, during his first term, tried to ban TikTok. But during his recent presidential campaign, he promised to save it, perhaps largely so that Mark Zuckerberg's Meta doesn't get more of a monopoly over US social media.

In March this year, Trump, on his own ironically named Truth Social, declared without evidence: "I don't want Facebook, who cheated in the last election, doing better," adding: "They are a true enemy of the people."

Then again, he could change his mind.

If ByteDance is forced to divest but no acceptable buyer can be found, Oracle, which provides IT services to TikTok in the US, has warned its revenue could suffer. In a June SEC filing, the database titan said, "If we are unable to provide those services to TikTok, and if we cannot redeploy that capacity in a timely manner, our revenues and profits would be adversely impacted." ®