TikTok plans lawsuit against Trump government over US transactions ban

24 Aug 2020

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TikTok and its parent company ByteDance are preparing a legal case against the US government over an executive order banning transactions with the popular video-sharing app.

As negotiations continue over the potential sale of TikTok following executive orders issued by US president Donald Trump, the company behind the video-sharing app is now reportedly looking to sue the US government.

An order issued by the Trump administration on 14 August tasked ByteDance with selling off TikTok’s US operations within 90 days. It followed another order on 6 August banning any transactions with the app in the US unless it is sold by its Chinese parent company.

According to Reuters, TikTok has now said that despite attempts to engage with the US administration on this issue, it faced “a lack of due process” and was repeatedly ignored.

“To ensure that the rule of law is not discarded and that our company and users are treated fairly, we have no choice but to challenge the executive order through the judicial system,” the TikTok statement said.

ByteDance issued its own statement yesterday (23 August), saying it will officially file a lawsuit against the US administration today.

Reuters has also reported that a number of ByteDance investors including General Atlantic are looking to take large stakes in a potential TikTok sale. Under this restructuring plan, Microsoft or Oracle could take a minority stake.

Sources familiar with negotiations said TikTok’s assets in North America, Australia and New Zealand could be worth as much as $30bn and that ByteDance’s investors are willing to exchange some or all of their stakes for equity in the TikTok assets. These sources also told Reuters that Microsoft remains the lead bidder for TikTok, with the US tech giant’s resources to design new algorithms working in its favour.

Facebook lobbying

Meanwhile, The Wall Street Journal has reported that Facebook CEO Mark Zuckerberg privately lobbied Trump during a dinner in the White House last October, claiming that Chinese tech companies pose a greater risk to the US than Facebook. Sources speaking with the news outlet said that Zuckerberg raised TikTok specifically in separate meetings with US senators.

A Facebook spokesperson said Zuckerberg does not remember TikTok being cited in his dinner with Trump.

“Our view on China has been clear: we must compete,” they added. “As Chinese companies and influence have been growing so has the risk of a global internet based on their values, as opposed to ours.”

Colm Gorey was a senior journalist with Silicon Republic