Appeals court upholds TikTok ban, declining to block law that would force sale

Washington — A federal appeals court upheld a law that will ban TikTok in the U.S. in the coming months if its Chinese parent company doesn't sell its stake in the app, dealing another setback to the widely popular video-sharing service in its battle with the federal government.

A panel of three judges from the U.S. Court of Appeals for the District of Columbia Circuit unanimously sided with the Justice Department in declining to review the petition for relief from TikTok and ByteDance, its Chinese parent company, saying the law is constitutional.

"We conclude the portions of the Act the petitioners have standing to challenge, that is the provisions concerning TikTok and its related entities, survive constitutional scrutiny," Senior Judge Douglas Ginsburg wrote in the majority opinion. "We therefore deny the petitions."

Congress approved a foreign assistance package in April that included provisions giving TikTok nine months to sever ties with ByteDance or lose access to app stores and web-hosting services in the U.S. President Biden quickly signed the bill into law, and it is set to take effect on Jan. 19, with the possibility of a one-time 90-day delay granted by the president if a sale is in progress by then. 

President-elect Donald Trump tried to ban TikTok during his first term in office, but reversed his position during the presidential campaign and vowed to "save" the app. He takes office on Jan. 20.

Lawmakers and national security officials have long had suspicions about TikTok's ties to China. Officials from both parties have warned that the Chinese government could use TikTok to spy on and collect data from its roughly 170 million American users or covertly influence the U.S. public by amplifying or suppressing certain content. The concern is warranted, they have argued, because Chinese national security laws require organizations to cooperate with intelligence gathering.

The appeals court's decision tees up a fight at the Supreme Court over the law's ultimate fate. The parties asked the judges to make a decision by Friday so there is enough time for the high court to review the case before the law takes effect. The justices could agree to hear the case and pause the law while they consider the legal arguments, or let the appeals court's ruling stand as the final word.

TikTok expects the law will be overturned by the Supreme Court, according to spokesperson Michael Hughes, who argued the law is based on "inaccurate, flawed and hypothetical information." 

"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," Hughes said in a statement. 

The Justice Department, meanwhile, applauded the decision.

"Today's decision is an important step in blocking the Chinese government from weaponizing TikTok to collect sensitive information about millions of Americans, to covertly manipulate the content delivered to American audiences, and to undermine our national security," Attorney General Merrick Garland said in a statement. "As the D.C. Circuit recognized, this act protects the national security of the United States in a manner that is consistent with the Constitution. The Justice Department is committed to defending Americans' sensitive data from authoritarian regimes that seek to exploit companies under their control."

The court's decision

"The First Amendment exists to protect free speech in the United States," Ginsburg wrote in his opinion. "Here the Government acted solely to protect that freedom from a foreign adversary nation and to limit that adversary's ability to gather data on people in the United States."

The appeals court said that it recognized the decision will have "significant implications" for TikTok and its users.

"Consequently, TikTok's millions of users will need to find alternative media of communication," Ginsburg said. "That burden is attributable to the [People's Republic of China's] hybrid commercial threat to U.S. national security, not to the U.S. Government, which engaged with TikTok through a multi-year process in an effort to find an alternative solution."

The D.C. Circuit found that the government's national-security justifications for banning TikTok — to counter China's efforts to collect Americans' data and limit its ability to manipulate content covertly on the platform — are "wholly consistent" with the First Amendment.

"The multi-year efforts of both political branches to investigate the national security risks posed by the TikTok platform, and to consider potential remedies proposed by TikTok, weigh heavily in favor of the Act," Ginsburg wrote. "The government has offered persuasive evidence demonstrating that the act is narrowly tailored to protect national security."

Rep. John Moolenaar of Michigan, the Republican chairman of the House China committee, praised the decision, calling it "a loss for the Chinese Community Party," while also expressing optimism about the app's future in the U.S. 

"I am optimistic that President Trump will facilitate an American takeover of TikTok to allow its continued use in the United States and I look forward to welcoming the app in America under new ownership," Moolenaar said in a statement. 

The House China committee spearheaded the bipartisan effort to pass the law. 

The legal arguments

TikTok and ByteDance filed a legal challenge in May that called the legislation "an extraordinary and unconstitutional assertion of power" based on "speculative and analytically flawed concerns about data security and content manipulation" that would suppress the speech of millions of Americans. 

"In reality, there is no choice," the petition said, adding that a forced sale "is simply not possible: not commercially, not technologically, not legally." 

The Chinese government vowed to block the sale of TikTok's algorithm which tailors content recommendations to each user. A new buyer would be forced to rebuild the algorithm that powers the app. Lawyers for TikTok and ByteDance said "such a fundamental rearchitecting is not remotely feasible" under the restrictions within the legislation. 

"The platform consists of millions of lines of software code that have been painstakingly developed by thousands of engineers over multiple years," the petition said. 

During oral arguments in September, the appeals panel appeared skeptical of TikTok's argument that free expression outweighs national security concerns, but the three judges were also critical of the government's stance. 

TikTok's lawyer Andrew Pincus said the law "is unprecedented and its effect would be staggering." 

"This law imposes extraordinary speech prohibition based on indeterminate future risks," Pincus said. "Notwithstanding the obvious less restrictive alternatives, the government has not come anywhere near satisfying strict scrutiny." 

Judge Sri Srinivasan said, under TikTok's rationale, the U.S. would not be able to ban a foreign country from owning a major media company in the U.S. if the two are at war. 

"Is your submission that Congress can't bar the enemy's ownership of a major media source in the U.S.?" Srinivasan, an Obama appointee, asked Pincus. 

When Pincus noted that news outlets like Politico and Business Insider are owned by foreign entities, Judge Neomi Rao, a Trump appointee, quickly chimed in: "But not foreign adversaries." 

Rao also pushed back on Pincus' argument that Congress did not include any evidence of its claims that TikTok poses a national security risk in the legislation. 

"I know Congress doesn't legislate all the time, but here they did," she said. "They actually passed a law and many of your arguments want us to treat them as an agency. It's strange. It's a very strange framework for thinking about our first branch of government." 

Attorney Jeffrey Fisher, who represents TikTok creators, compared the restrictions on TikTok to the U.S. government hypothetically banning bookstores from selling books written by foreign authors in conjunction with a foreign government. 

"We're not talking about banning Tocqueville in the United States," Rao countered. "We're talking about a determination by the political branches that there's a foreign adversary that is potentially exercising covert influence in the United States. Very different." 

Ginsburg, a Reagan appointee, expressed skepticism over the notion that the law singles out TikTok. 

"It describes a category of companies, all of which are owned by or controlled by adversary powers and subjects one company to an immediate necessity," he said, noting that the company and the government have been engaged in unsuccessful negotiations for years to try to find a solution to the national security concerns. "That's the only company that sits in that situation." 

Justice Department lawyer Daniel Tenny said the data on Americans that could be collected through the app "would be quite valuable to a foreign adversary if it were trying to approach an American to try to have them be an intelligence asset." Tenny also spoke about the risk of content manipulation by China. 

"What is being targeted is a foreign company that controls this recommendation engine and many aspects of the algorithm that's used to determine what content is shown to Americans on the app," Tenny said. 

But Srinivasan said it's Americans' choice to use the app, despite what content may appear. 

"The fact that that's being denied subjects this to serious First Amendment scrutiny," he said. 

He later added, "What gives arguable force to the other side's First Amendment argument is that it's not just that the government is targeting curation that occurs abroad. It's the reason the curation occurring abroad is being targeted, and the reason is a concern about the content consequences of that curation in the U.S."