TR Daily TikTok Sues to Block Trump’s Ban
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Monday, August 24, 2020

TikTok Sues to Block Trump’s Ban

TikTok, Inc., and its Beijing-based owner, ByteDance Ltd., today filed a federal lawsuit challenging the Trump administration’s efforts to undermine its business and prevent it from operating in the U.S.

The lawsuit, filed at U.S. District Court for the Central District of California, says an executive order issued by President Trump and a directive from the Committee on Foreign Investment in the U.S. (CFIUS) violate the companies’ constitutional rights and overstep the authority of the president under the International Emergency Economic Powers Act (IEEPA).

“IEEPA vests the president with significant power to prohibit certain transactions to protect U.S. national security,” the companies say in “TikTok, Inc., and ByteDance Ltd. v. Donald J. Trump, in his official capacity as president of the United States, and Wilbur Ross, in his official capacity as secretary of Commerce” (no. 2:20-cv-7672).

“Past presidents have used this power responsibly to protect the country from genuine threats from abroad, including terrorism and the proliferation of weapons of mass destruction. Through this executive order, however, President Trump seeks to use IEEPA against TikTok, Inc., a U.S. company -- headquartered in Los Angeles with hundreds of employees across the United States -- to destroy an online community where millions of Americans have come together to express themselves, share video content, and make connections with each other,” the lawsuit says.

“The order is thus a gross misappropriation of IEEPA authority and a pretext for furthering the president’s broader campaign of anti-China rhetoric in the run-up to the U.S. election,” it says.

“The executive order seeks to ban TikTok purportedly because of the speculative possibility that the application could be manipulated by the Chinese government. But, as the U.S. government is well aware, plaintiffs have taken extraordinary measures to protect the privacy and security of TikTok’s U.S. user data, including by having TikTok store such data outside of China (in the United States and Singapore) and by erecting software barriers that help ensure that TikTok stores its U.S. user data separately from the user data of other ByteDance products,” it adds.

“By banning TikTok with no notice or opportunity to be heard (whether before or after the fact), the executive order violates the due process protections of the Fifth Amendment,” it says. Another Fifth Amendment violation would occur if President Trump follows through on his threat to require TikTok to make a payment to the U.S. Treasury as part of a proposed acquisition by Microsoft Corp., according to the lawsuit.

The lawsuit also claims a First Amendment violation because the administration’s actions undermine TikTok and its users’ rights to free expression.

In addition to the executive order, which gave the Commerce Department 45 days to determine which “transactions” involving TikTok and ByteDance should be banned in the U.S., CFIUS recently ordered ByteDance to retroactively unwind the 2018 merger that created the popular TikTok video-sharing service (TR Daily, Aug. 17).

“Through the course of the CFIUS review, ByteDance provided voluminous documentation and information in response to CFIUS’s questions. Among other evidence, ByteDance submitted detailed documentation to CFIUS demonstrating TikTok’s security measures to help ensure U.S. user data is safeguarded in storage and in transit and cannot be accessed by unauthorized persons -- including any government -- outside the United States,” the lawsuit says.

"CFIUS never articulated any reason why TikTok’s security measures were inadequate to address any national security concerns and effectively terminated formal communications with plaintiffs well before the conclusion of the initial statutory review period,” and CFIUS’s decision “was principally based on outdated news articles, failed to address the voluminous documentation that plaintiffs had provided demonstrating the security of TikTok user data, and was flawed in numerous other respects,” it says.

“To be clear, we far prefer constructive dialogue over litigation,” TikTok said in a statement issued today before the lawsuit was filed. “But with the executive order threatening to bring a ban on our U.S. operations -- eliminating the creation of 10,000 American jobs and irreparably harming the millions of Americans who turn to this app for entertainment, connection, and legitimate livelihoods that are vital especially during the pandemic -- we simply have no choice.”

The administration had no immediate comment on the lawsuit, but over the weekend Secretary of State Michael Pompeo insisted that the administration’s actions toward TikTok and other Chinese companies were motivated by security concerns. “Our effort is to make sure that when you have networks, you have information that passes across international networks all across the world. We are attempting to identify where those risks are, where these untrusted vendors might operate, and making sure that we take that risk down,” he said on CNBC.

Mr. Pompeo indicated that additional Chinese companies might face U.S. penalties. “We haven’t focused on any particular company. We’ve focused on technologies and the Chinese Communist Party. Our focus has not been to go after any Chinese company because of their commercial success. It’s been to go after Chinese Communist Party entities, or commercial entities being driven by the Chinese Communist Party, that present national security risks to the United States of America,” he said.

“Will there be other companies that follow? I hope not. I hope the Chinese Communist Party will disconnect and not operate the way they do. But to the extent -- and I anticipate this will be the case -- that they continue to demand that every state-owned enterprise, every Chinese company is beholden to their security apparatus, then we’ll continue to go after them to make sure that the American people have the security levels that they have an expectation of with respect to not only technology firms, but every company operating here in the United States,” Mr. Pompeo added.

The Chinese Foreign Ministry, on the other hand, today said U.S. actions against Chinese companies were motivated by protectionism and prejudice. “Some U.S. politicians are working to crush such Chinese companies as TikTok, WeChat, and Huawei because they are down with an anti-China syndrome and will strike at anything Chinese,” said Zhao Lijian, a ministry spokesperson. “That explains their frantic attempts to hunt down TikTok and other Chinese companies by pinning the ideological label on them under the pretext of ‘national security.’ All the lies and smears are just disguise for their daylight bullying and robbery.” —Tom Leithauser, [email protected]

MainStory: Cybersecurity Courts FederalNews

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