Appeals Court Sides With US Government on Pending TikTok Commercial Ban

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A federal appeals court rejected TikTok's attempt to stop a looming ban on US app-store and internet-hosting transactions, finding the government’s national-security concerns about the platform to be “well founded, not speculative” while rejecting TikTok’s arguments that a forced sale to US buyers would violate constitutional protections.

Writing for a three-judge panel of the Court of Appeals for the District of Columbia Circuit, Judge Douglas H. Ginsburg said that the forced-divestiture provisions of the Protecting Americans from Foreign Adversary Controlled Applications Act, signed into law by President Biden in April as part of a supplemental-spending bill (PDF), “survive constitutional scrutiny.”

The court’s 92-page opinion (PDF), including a concurring opinion from Judge Sri Srinivasan, agrees with a common concern about the platform owned by Beijing-based ByteDance: While we can’t tell if the People’s Republic of China has exploited TikTok to spy on Americans or push its own propaganda, we do know that Beijing could compel TikTok to do any of these things.

Ginsburg cites Chinese laws requiring companies to assist the government in criminal and national-security cases, like TikTok spying on journalists covering the company, and the extensive history of Chinese espionage in the US. (This week alone yielded further revelations of the massive extent of state-sponsored hacks of US telecom firms.)

The judge also deferred to the US assessment of TikTok’s recommendation algorithm as a tool that China could exploit to shift public opinion here.

“On the one hand, the government acknowledges that it lacks specific intelligence that shows the PRC has in the past or is now coercing TikTok into manipulating content in the United States,” Ginsburg writes. But that doesn’t mean that it didn’t happen, adding that “TikTok never squarely denies that it has ever manipulated content on the TikTok platform at the direction of the PRC," he adds.

TikTok had proposed to address those concerns with an extensive oversight regime that it called Project Texas, which would have put Oracle in charge of its US infrastructure and given the US government extensive veto power over the platform. The White House ultimately rejected that as unworkable.

Ginsburg agrees with the government’s logic there as well but adds his own constitutional concern over that proposed remedy: “Entangling the US government in the daily operations of a major communications platform would raise its own set of First Amendment questions.”

The judge found no such hang-ups with the law banning app-store and hosting transactions with TikTok starting on Jan. 19, 2025, which the president can defer for 90 days if he finds that a sale is progressing. (Donald Trump had sought to ban TikTok in his first term but joined the platform in June and has since opposed banning it.)

Ginsburg writes upfront that the law in question “does not suppress content or require a certain mix of content” because it only targets the PRC’s ability to influence content and would leave users of a post-divestiture TikTok “free to read and share as much PRC propaganda (or any other content) as they desire.”

ByteDance has repeatedly said it will not sell the platform, in part because China has enacted prohibitions on such a divestiture. In a not-our-problem response, Ginsburg describes TikTok’s objections on those grounds as unacceptable for the way it would allow “a foreign adversary nation” to use its own laws to block US laws “designed to counter the national security threats presented by that very nation.”

In a statement, TikTok said: "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. 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 19th, 2025."

Kate Ruane, director of the Free Expression Project at the Center for Democracy and Technology, added that the decision "will immeasurably harm the free expression of hundreds of millions of TikTok users in the US and globally who use the app to create, to share information, to get their news, and promote their businesses.

"We hope the next phase of review of this misguided and overbroad law will be a chance to right this wrong and prevent it from going into effect," Ruane added.

Among the cast of characters who have pondered bids to buy TikTok are former U.S. Treasury Secretary Steven Mnuchin and former Activision CEO Bobby Kotick. Former Los Angeles Dodgers owner Frank McCourt has also been advancing a “People’s Bid” bid to buy the platform and rebuild it on a decentralized foundation; he declared himself ready on Friday.

“Now that the Court has spoken, The People's Bid is prepared to move forward with our bid for TikTok – which brings together a wide network of supporters and experts across policy, technology, and civil society committed to preserving the platform's rich creative community, while also protecting the personal information of millions of Americans,” he said in a press release. “We are going to rebuild TikTok and prove that it's possible to enjoy the internet without sacrificing our privacy and safety."

Axios reported Thursday that McCourt and other investors had lined up some $20 billion to fund this purchase. But that bid and any other will almost certainly go nowhere until after the Supreme Court can take up the case, which now seems likely as the last stop in this legal saga.