TikTok is suing the U.S government over President Trump’s executive orders, making us wonder whether this will be the biggest legal battle of this year.
Let’s start from the beginning.
On August 6, President Trump signed an executive order blocking all transactions with TikTok’s parent company ByteDance. This was done to “address the national emergency with respect to the information and communication technology supply chain.” Also, the order invoked the International Emergency Economic Powers Act and the National Emergencies Act and it was intended to come into effect within 45 days.
It was said that this order could force landlords housing TikTok operations to evict them and may also make it impossible for the U.S lawyers to represent TikTok in any legal proceedings. Post the 45-day period, conducting business with TikTok might result in a $300,000 fine per violation and “willful” offenders may even face criminal prosecution.
But this order was not the one that pushed ByteDance to sue the U.S government, the one which came on August 14 was. On August 14, Trump signed another executive order, giving ByteDance 90 days to either sell or spin-off its U.S business. And this was the order that pushed ByteDance to the edge.
The Lawsuit
Last Saturday, TikTok confirmed that it will file a lawsuit against the U.S President Trump administration. In a statement to The Verge, TikTok spokesperson Josh Gartner said, “What we encountered instead was a lack of due process as the administration paid no attention to facts and tried to insert itself into negotiations between private businesses.”
Sources told NPR that ByteDance will argue that “It (the executive order) is based on pure speculation and conjecture”, adding that “the order has no findings of fact, just reiterates rhetoric about China that has been kicking around”.
If you are wondering why TikTok is suing only the U.S and not India, which has also banned the app, then here’s your answer: India has banned the app but the U.S is pushing the company to divest its operations in the U.S. This means that TikTok has to sell its operations in the U.S to any other U.S company and there is no other way out for the company.
The Future
At present, ByteDance is having discussions with Microsoft to buy TikTok operations in the U.S, Canada, Australia and New Zealand. According to reports, the deal is projected to be worth $10–13 billion. Reports also say that ByteDance is in discussions with Twitter as well as Oracle to sell the app.
If the company manages to sell its operations to another U.S company, then it will be great for both ByteDance and its users. On the other hand, if ByteDance wins the lawsuit, the executive order, which pushes ByteDance to sell TikTok’s U.S operations, will not be valid and the company will continue to exist and everything will go back to the way they were. However, many say that it is highly unlikely that ByteDance will win the lawsuit.
Why you ask? Because many Chinese technology companies have close ties to the country’s communist party. So, there is a high probability that the government will agree to ban the app completely if it is unable to sell it before the deadline.
In conclusion, ByteDance has 22 more days until the 45-day deadline ends and these 22 days will judge whether TikTok survives this battle or not. And at this point, selling TikTok’s U.S operations looks like the brightest option for us.
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