The TikTok targeting sell-or-be-banned law recently passed by US Congress is both unrealistic and unconstitutional, says TikTok, which yesterday formally launched legal proceedings against the US government in a bid to overturn the act that introduced the law. It’s the “sell” bit that is unrealistic, while the “be banned” outcome is unconstitutional.
“For the first time in history, Congress has enacted a law that subjects a single, named speech platform to a permanent, nationwide ban, and bars every American from participating in a unique online community with more than one billion people worldwide”, says the legal filing.
“Banning TikTok”, it continues, “is so obviously unconstitutional, in fact, that even the act’s sponsors recognised 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”.
It is true that supporters of the new law, when debating the measures in Congress, were keen to stress that the most likely outcome of the legislation was a change in ownership at TikTok. That would mean China-based ByteDance selling TikTok or at least its US business.
Although other concerns have been raised about the video-sharing app in political circles, including how it deals with harmful content, the sell-or-be-banned law was primarily motivated by the allegation that the Chinese government has access to TikTok user-data via ByteDance.
The insistence that ByteDance would ultimately sell the app to comply with the law was partly to allay the concerns of TikTok’s American creators and users, but also partly to counter arguments the anti-TikTok measures violate the First Amendment of the US constitution.
Throughout their lobbying campaign, TikTok’s bosses and lobbyists insisted that ByteDance would not – and even could not – sell TikTok. Some reckoned that was a simple bluff to try to rally the support of TikTok users in the US against the legislation. However, sources at ByteDance told journalists that the company really would rather shut down in the US than sell the app.
The new legal filing sets out various reasons why selling TikTok, even just in the US, isn’t practical: commercial reasons, technical reasons and legal reasons.
Commercially speaking, it argues, the TikTok experience is all about content being shared around the world. But “a divestment of the US TikTok platform, without any operational relationship with the remainder of the global platform, would preclude the interoperability necessary to make international content seamlessly available in the US market and vice versa”. Therefore splitting off TikTok US would make the platform unviable.
Technically speaking, it claims, if some or all of TikTok’s code and algorithm were sold to a different company that, by law, could not interact with ByteDance, “it would take years for an entirely new set of engineers to gain sufficient familiarity with the source code to perform the ongoing, necessary maintenance and development activities for the platform”.
Legally speaking, any sale would likely be blocked in China. “The Chinese government has made clear that it would not permit a divestment of the recommendation engine that is a key to the success of TikTok in the United States”, it explains. “Like the United States, China regulates the export of certain technologies originating there. China’s export control rules cover ‘information processing technologies’ such as ‘personal interactive data algorithms’”.
Elsewhere in its legal filing, TikTok is keen to present itself and ByteDance as global enterprises founded by Chinese entrepreneurs, rather than as a Chinese app controlled by a Chinese business. TikTok US, it says, is run by “TikTok Inc, a California-incorporated company that has its principal place of business in Culver City, California and offices in New York, San Jose, Chicago, and Miami, among other locations”.
As for its parent company, “approximately 58% of ByteDance Ltd is owned by global institutional investors (such as BlackRock, General Atlantic and Susquehanna International Group), 21% is owned by the company’s founder (a Chinese national who lives in Singapore), and 21% is owned by employees – including approximately 7000 Americans”.
TikTok has constantly denied the data security concerns raised by politicians across the world. In the US, it has also repeatedly highlighted its work with American company Oracle to put in place new systems and safeguards to reassure politicians and government officials about how user-data is managed, work that has been developed in consultation with the US government.
The legal filing – keen to present the new law as a badly thought out knee jerk reaction by a Congress that failed to identify and consider specific problems and solutions – talks up that existing work, which is often referred to as Project Texas.
TikTok, the filing states, has “voluntarily invested more than $2 billion to build a system of technological and governance protections to help safeguard US user data and the integrity of the US TikTok platform against foreign government influence”. It has also “made extraordinary, additional commitments in a 90 page draft National Security Agreement developed through negotiations” with the US government’s Committee On Foreign Investment In The US.
“Congress tossed this tailored agreement aside, in favour of the politically expedient and punitive approach of targeting for disfavour one publisher and speaker (TikTok Inc), one speech forum (TikTok), and that forum’s ultimate owner (ByteDance Ltd)”, the legal filing continues, adding “Congress provided every other company – however serious a threat to national security it might pose – paths to avoiding a ban, excluding only TikTok Inc and ByteDance Ltd”.
It then concludes, “Congress must abide by the dictates of the Constitution even when it claims to be protecting against national security risks. Congress failed to do so here, and the act should be enjoined”.
There are no real surprises in TikTok’s filing and supporters of the sell-or-be-banned law have previously insisted that it is written in a way that should ensure it is deemed constitutional by the courts. However, TikTok has successfully blocked previous attempts to ban the app in the US – by former President Donald Trump and more recently the state of Montana – on constitutional grounds. Not all the arguments used in the previous cases are relevant here, but some are.
We will now see to what extent those arguments work this time round.