TikTok US Ban Looms After Losing Court Appeal

A Federal appeals court on Friday upheld a law requiring China-based ByteDance Ltd. to divest its entire stake in TikTok in the United States or face a nationwide ban, over fears that the Chinese government could be potentially using the social media app to access personal information of 170 million Americans.

The decision was a major blow for ByteDance which could potentially lose its footing in the US by January 19, but a major win for the Justice department and ByteDance’s opponents, including Meta.

According to a report by Reuters, TikTok plans to appeal the decision to the Supreme Court.

The Justice department earlier said that TikTok under a Chinese ownership poses a threat due to its access to vast personal data of Americans. It added that China can covertly manipulate information that Americans consume through the said app.

Attorney General Merrick Garland called the decision an important step in blocking the Chinese government from weaponizing TikTok.

However, the Chinese Embassy in Washington called the law “a blatant act of commercial robbery” and warned that the US “must handle this case in a prudent manner to avoid harming the mutual trust between the two countries and the development of bilateral relations.”

The US and China have long been in growing trade tensions. The latest blow came after President Joe Biden placed new restrictions on China’s chip industry and Beijing responded by imposing an outright ban on exports of gallium, germanium, and antimony to the US.

TikTok Chief Executive Officer (CEO) Shou Zi Chew was quoted as saying that while the news was disappointing, it will continue its fight to protect free speech on TikTok.

Advocates of free speech criticized the ruling, saying the TikTok ban “blatantly violates the First Amendment rights of millions of Americans who use this app to express themselves and communicate with people around the world.”

Unless the Supreme Court reverses the decision, TikTok’s fate would remain in the hands of Biden on whether the company would be granted a 90-day extension of the January 19 deadline to force a sale, or face its fate under president-elect Donald Trump who is set to reassume office on January 20.

It is not clear, however, whether ByteDance could meet the heavy burden to show significant progress toward a divestiture needed to trigger an extension, or if the Chinese government would greenlight any sale.

Trump, who failed to ban TikTok during his first term in 2020, said before the November presidential election that he would not allow the TikTok ban.