TikTok files petition to stop Trump’s Thursday deadline

ByteDance is fighting an effort by the Trump administration to force the sale of its investment in TikTok's U.S. operations.
(Associated Press)

ByteDance on Tuesday sought relief from the federal appeals court in Washington to block a move by the Trump administration that would force it to sell its popular video sharing app TikTok.

The Beijing tech company had been planning to sell ownership stakes in TikTok to Silicon Valley cloud computing company Oracle and Arkansas retail giant Walmart, a plan that was initially blessed by President Trump in September.

But the prospects of getting a deal done have grown murkier since Joe Biden was elected president and Trump has filed legal challenges disputing the result.

In its petition, ByteDance said it has not received clarity on whether its proposed plan would be accepted, or if it would be given a 30-day extension. The Committee on Foreign Investment in the U.S. had set a Thursday deadline for TikTok to sell its U.S. operations, or risk being shut down.

The committee has raised security concerns about ByteDance’s acquisition of lip-synching app, which has millions of U.S. users.


“We remain committed to working with the administration — as we have all along — to resolve the issues it has raised, but our legal challenge today is a protection to ensure these discussions can take place,” TikTok said in statement.

Treasury spokeswoman Monica Crowley said on Wednesday that the department “remains focused on reaching a resolution of the national security risks arising from ByteDance’s acquisition of” and it has “been clear with ByteDance regarding the steps necessary to achieve that resolution.” Crowley referred further questions about the pending litigation to the Justice Department, which did not respond to a request for comment.

Walmart and Oracle declined to comment.

The Trump administration has raised security concerns over whether ByteDance would give the Chinese government access to TikTok’s U.S. user information. TikTok has disputed the claim and said its American user data is in the U.S. and backed up in Singapore.

The social video app faces growing scrutiny from the U.S. government, rising competition from rivals like Facebook and the defection of top creators.

July 31, 2020

TikTok has been working on a deal to resolve some of the Trump administration’s security concerns. In one proposal, a new entity called TikTok Global would be formed, with Oracle and Walmart owning up to 20% of the company and the app running on Oracle Cloud.

President Trump signed two executive orders, one requiring ByteDance to divest its ownership by Nov. 12 and another that would bar transactions with TikTok.

“They violated the due process clause because they prematurely terminated the review to which petitioners were entitled and denied them a meaningful hearing,” ByteDance and TikTok said in their petition.

TikTok already has had some success in court.

A federal judge granted a preliminary injunction stopping the app’s removal from U.S. mobile app stores.


And last month a federal judge ruled favorably on behalf of TikTok creators who filed a separate lawsuit to halt the app’s ban on Thursday. Judge Wendy Beetlestone said in her ruling that “the government’s own descriptions of the national security threat posed by the TikTok app are phrased in the hypothetical.”

TikTok said its business has been suffering amid the uncertainty, making it hard to recruit workers and causing a $10-million loss in revenue in August. TikTok is used by 98 million monthly active users in the U.S.