TikTok Pushes Back on Trump in Court While Angling for Deal
The TikTok app is displayed in the app store in in view of a video feed of U.S. President Donald Trump. (Photographer: Hollie Adams/Bloomberg)

TikTok Pushes Back on Trump in Court While Angling for Deal

TikTok’s Chinese owner asked a federal judge to stop President Donald Trump from enforcing a ban that would remove the viral video-sharing network from U.S. app stores this weekend.

ByteDance Ltd. filed on Wednesday for a temporary block on the ban even as it continues to pursue approvals from the Trump administration for a sale of its U.S. operations to Oracle Corp. and Walmart Inc. The Chinese company asked the Washington court to set a hearing before the rules take effect at 11:59 p.m. on Sept. 27 and proposed that both sides file additional briefs this week.

ByteDance’s request deploys many of the same arguments a group of WeChat users made to win their own preliminary injunction last weekend against a similar ban. Both TikTok and WeChat, owned by China’s Tencent Holdings Ltd., have been labeled national security threats by the Trump administration, which is seeking to stop their use in the U.S. -- or, in TikTok’s case, force a sale to U.S. companies -- on the grounds they could allow China’s government to gain access to personal data from millions of Americans.

TikTok Pushes Back on Trump in Court While Angling for Deal

The TikTok ban, proclaimed in an Aug. 6 executive order by the president, is part of a wider effort by the Trump administration to take a hard line against Beijing, betting that a tough approach will help win the president re-election. Secretary of State Michael Pompeo has urged U.S. companies to bar Chinese applications as part of his “Clean Network” guidance.

ByteDance also needs China’s approval to proceed with the deal. The company submitted an application this week, though it’s unclear how long Beijing’s review will take.

Ticking Clock

ByteDance’s preliminary-injunction request challenges new Commerce Department rules that would remove TikTok from app stores and require changes to the viral network’s core functionality that the company says would effectively shut it down in the U.S. by mid-November.

Filing in response, the U.S. said “there is no need for the parties (or for this court) to conduct emergency proceedings and wade into sensitive issues of national security and foreign policy on the basis of a limited record prepared on an extremely short time frame.”

Justice Department spokeswoman Mollie Timmons declined to comment on whether the department would challenge the injunction. The Commerce Department didn’t immediately respond to a request for comment.

ByteDance argues that the TikTok ban exceeds the Trump administration’s legal authority. Its filing echoes a number of the arguments made by WeChat, which said a ban would infringe on its First Amendment rights and cause irreparable harm to the company.

‘Irreparable Harm’

TikTok has “made extraordinary efforts to try to satisfy the government’s ever-shifting demands and purported national security concerns,” ByteDance said in its filing. “In the absence of preliminary injunctive relief, the August 6 order and the prohibitions will cause plaintiffs irreparable harm.”

Trump has given his conditional blessing to the plan for Oracle and Walmart to take a stake in TikTok, but the arrangement is by no means final. The Committee on Foreign Investment in the U.S. still needs to sign off, as do officials in China, where the state-run news media have denounced the plan as “an American trap” and an “underhanded trick.”

There are also significant disagreements over the specifics of the deal. ByteDance says it plans to retain 80% of TikTok Global, the new company that would result from the deal. Oracle says the company will be mostly owned by U.S. entities and that ByteDance will have no ownership.

U.S. District Judge Carl Nichols set a hearing for 10 a.m. Thursday to discuss the scheduling dispute.

©2020 Bloomberg L.P.

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