Facing Pressure to Sell, TikTok Compares Company to Politico, Business Insider in New Filing

On Aug. 15, attorneys representing TikTok and its China-based parent company ByteDance compared themselves to news companies like Politico, Business Insider, and others that publish in the American market in arguing that a ban or forced sale of the company would be unconstitutional.

President Joe Biden earlier this year signed a law that started a countdown to next January requiring ByteDance to either sell the app to a non-Chinese company or be banned in the United States. ByteDance sued, arguing the new law violated the First Amendment and was unconstitutional.

A federal court ruled against ByteDance, and did not find the new law unconstitutional.

The federal court ruled that TikTok and ByteDance had no First Amendment protections because they were not American entities but instead “foreign organizations operating abroad” or organizations owned by such. Petitioners are now arguing that, by this logic, “a U.S. newspaper that republishes the content of a foreign publication—Reuters, for example … would lack constitutional protection,” skirting the fact that the media companies used as examples are not controlled by foreign adversaries.

ByteDance appealed, and oral arguments in the appeals court are scheduled for Sept. 16.

“Does the government seriously believe, for example, that Politico (owned by a German company) has no First Amendment rights?” the brief reads. “Surely the American companies that publish Politico, Fortune, and Business Insider do not lose First Amendment protection because they have foreign ownership.”

The law does not ban companies with foreign ownership; instead, it prohibits a “foreign adversary controlled application” from operating in the United States.

Reps. Mike Gallagher (R-Wisc.) and Rep. Raja Krishnamoorthi (D-Ill.), chair and ranking member of a House Select Committee on the Chinese Communist Party (CCP), first introduced the bill in March. The bill refers to the CCP as a foreign adversary as defined by Congress in Title 10. This includes the regimes of North Korea, CCP, Russia, and Iran.

Much of ByteDance’s argument hinges on the presumption that the government must prove that the foreign adversary, in this case the CCP, also controls the content on TikTok, while the government argues the law does not require this.

Where’s the Data?

Congress introduced the law to protect Americans from apps that are controlled by foreign adversaries, citing national security concerns if American’s data were to be used by an entity like the CCP.

TikTok and ByteDance argued that neither the app nor parent company is “domiciled in” China, that the recommendation algorithm resides in the United States and not China, and that user data resides “not in China, but in the secure Oracle cloud.”

The petitioners argue that the government has not shown any proof that data is shared with Beijing and that the act unfairly targets and singles out the TikTok app.

But whether or not TikTok has previously shared data with the CCP, China has updated their counterespionage law to require companies in China, even foreign companies, to hand over data upon request. ByteDance would have no protections against giving the CCP any data from TikTok if the regime so requested, even if laws in the user’s country made it illegal to do so.

Last June, the U.S. National Counterintelligence and Security Center specifically warned Americans and American companies in China about the broad counterespionage law.

In March, after the introduction of the TikTok bill, Congress also passed a bill to prohibit the sale of Americans’ data to foreign adversaries, following an executive order that authorized the Department of Justice to prevent “the large-scale transfer of Americans’ personal data.”

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