TikTok and ByteDance have filed a lawsuit against the federal government challenging the constitutionality of the Protecting Americans From Foreign Adversary Controlled Apps Act, which requires ByteDance to sell TikTok’s U.S. operations by January 19, 2025 or face a ban in the United States. The companies have invested over $2 billion in Project Texas, a framework to separate ownership from control, but this proposal was rejected by CFIUS and Congress, leading to the passage of the ban bill.
TikTok and ByteDance claim that CFIUS stopped engaging with them between August 2022 and March 2023, leading to the ultimatum to sell TikTok or face a ban. During this time, Forbes revealed surveillance efforts by ByteDance’s Internal Audit and Risk Control department on reporters. The companies also state that ByteDance founder Zhang Yiming is legally domiciled in Singapore, not China, where he has lived since 2022.
The companies now acknowledge the tight integration between TikTok and ByteDance’s systems, making it impossible to separate them. They argue that TikTok engineers would need access to ByteDance software tools to keep the platform running, which is prohibited by the ban bill. This reliance on ByteDance’s systems undermines previous claims of separation between TikTok and ByteDance.
The ban bill places TikTok and all other ByteDance apps in a category without requiring the presidential designation needed for other apps covered by the law. TikTok and ByteDance argue that this structure makes the law a Bill of Attainder, seeking to punish a specific entity, which is unconstitutional. They also acknowledge that the Chinese government would prohibit ByteDance from selling its recommendations algorithm.
Lawmakers’ comments about TikTok content could hinder the government’s defense in court, as TikTok and ByteDance argue that the law was driven by hostility towards the app’s content. The companies also question a carve-out for review apps in the law, claiming it favors certain speech over others. Both parties have been gathering evidence for an impending showdown, with TikTok and ByteDance arguing that the ban bill was rushed and not the narrowest path available. The government, however, has spent years in negotiations and investigations regarding TikTok and ByteDance.
