A federal judge has blocked the Trump administration's attempt to ban TikTok downloads for users in the U.S.The ruling gave the Chinese app a short-term victory as it tries to secure its future while embroiled in a micro-political battle between global superpowers.
The ruling by Judge Carl Nichols of the U.S. District Court in Washington, D.C., gives TikTok owner ByteDance Ltd.more time to get approval from U.S. and Chinese authorities for a pending deal involving its acquisition by Oracle Corp. and Walmart Inc.
The court drama on Sunday, with the decision coming less than four hours before the ban was set to take effect, was a new chapter in the protracted story, with no clear end yet.
President Donald Trump earlier this month gave the TikTok deal his “blessing” as a way to address his administration’s national security concerns. The U.S. Committee on Foreign Investment still has to approve the details, including who will have majority ownership. The Chinese government could also do so.
Of course, the specter of a future US government ban still looms. The Department of Commerce is scheduled to implement a full ban on November 12, rendering the app useless to US users if a US deal for TikTok is not finalized by then.
The courts could also work with the government and allow the ban to proceed. Judge Nichols, who was appointed by President Trump last year, on Sunday asked both sides to propose a timeline for more detailed arguments. He did not immediately explain the decision to block the ban indefinitely. The video platform has become very popular in the past year, especially among young people, and its downloads have increased amid the pandemic.
TikTok says the app has more than 50 million daily active users in the U.S., and 100 million monthly. A company spokesperson said in a statement late Sunday that it was satisfied with the court's legal arguments to halt the ban.
“We will continue to defend our rights for the benefit of our community and workers.”
The company also plans to continue its discussions with the U.S. government to reach an agreement, the spokesman said. The Commerce Department said in a statement Sunday that it would comply with the order but plans to vigorously defend efforts to enforce other legal frameworks.
The ruling marked the second time in a week that U.S. courts have rejected the Trump administration's efforts to block Americans from accessing Chinese-owned apps. Last week, a U.S. judge ruled to ban the popular messaging app WeChatafter a group of app users sued the government.
Governments in both countries are actively reviewing ByteDance's proposed resolution. In China, officials are concerned that ByteDance will lose control of its popular app and technology.
In the US, officials said they were reviewing any deal aimed at achieving their own goal: controlling the removal of TikTok from Chinese owners due to concerns that data the company collects from American consumers could be shared with the Chinese government, threatening US national security.
ByteDance’s deal with Oracle and Walmart is designed to address those concerns. Under a preliminary agreement approved by Trump, Oracle and Walmart will take a combined 20% stake in TikTok Global, a new U.S. headquarters that would run the global service.
Details about the structure are still being worked out, people involved in the talks said, as the companies try to ensure it wins final approval from both governments.
One point of confusion has been the exact ownership split, with TikTok and Oracle issuing conflicting messages since the preliminary deal was announced. A ByteDance spokesperson said it would immediately own 80% of TikTok Global, while Oracle has publicly stated that the Americans would be the majority owners and ByteDance would have no ownership in TikTok Global.
But another person close to the situation disputed that theory and said Americans would be the majority owners once the new company is formed. With the deal under scrutiny, the video company argued in court on Sunday that the download ban would hurt its business.
“This is just punitive,” TikTok lawyer John Hall said during arguments Sunday. “It’s just a blunt way to hit the company now, without doing anything to achieve the stated goal of the bans.”
Justice Department attorney Daniel Schwei defended the federal government's intent to protect TikTok users' personal data and stop new users from potentially putting even more data at risk.
Commerce Secretary Wilbur Ross has the right “to address the most significant, immediate threat to national security, which is new users who continue to sign up and make their data vulnerable to the Chinese government,” Mr. Schwei said.
In a memo filed with the court on Friday, the U.S. government said one reason for concern is a “high level” of activity between U.S.-based TikTok users and IP addresses located in China, owned by a Chinese company. The memo also said that before February 2019, the company had stored U.S. user data in China, according to the Wall Street Journal.
Before Sunday's hearing, other tech companies were hesitant to side with TikTok. "There is no precedent in U.S. history for a blanket ban on a social media platform that directly deprives a quarter of the U.S. population of access to information," NetChoice, a trade group representing internet giants including Amazon.com Inc., Facebook Inc. and Google Inc., said in court.
The group also warned that the Trump administration’s ban could provide other governments with “new excuses to block American technology companies from accessing foreign markets.” The U.S. government has not provided “evidence that the Chinese Communist Party or military has obtained data on TikTok users in the United States,” adding that the government could address its concerns in other ways, such as data security safeguards.
