The Trump administration gave TikTok a deadline of 12 November to restructure its business, but the company is now looking for an extension.
TikTok and its parent company ByteDance have called for more time to work out a divestiture deal in the US. The US Committee on Foreign Investments in the US (CFIUS) had set a deadline of 12 November for ByteDance to divest TikTok assets or property based in the US.
However, with the deadline now here, ByteDance said that it had heard nothing from the Trump administration for some time and had applied for a 30-day extension. Now, according to The Wall Street Journal, TikTok and ByteDance have issued a petition with a US federal appeals court.
If successful, the suit could see the government’s legal basis in the case against ByteDance overturned. The petition filed by the company stated that the divesture demand ordered by the government was “arbitrary and capricious” and had denied TikTok due process under US law.
China-headquartered ByteDance added that it had been in extensive discussions with CFIUS to come to an arrangement, but a lack of communication from the government has seen talks come to a halt.
In oral arguments before a judge, TikTok lawyers argued that the 12 November deadline could result in the shutting down of personal communications and informational materials. This, they claimed, would be an impermissible use of the International Emergency Economic Powers Act.
An uncertain future
TikTok’s future in the US was under threat after US president Donald Trump signed an executive order against the app in August, stating that it would be banned in the US unless it was sold by its Chinese parent company. Trump claimed that the step was necessary to deal with the “national emergency” posed by the app.
In September, Trump gave his blessing to a deal that would see Oracle and Walmart take a combined 20pc stake in a newly formed TikTok Global business. In a joint statement at the time, the US companies said that TikTok Global would be responsible for “providing all TikTok services to users in US and most of the users in the rest of the world”. No deal has yet been completed.
In a statement following this most recent petition, a TikTok spokesperson said: “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.”
Monica Crowley, a spokesperson for the US Department of Treasury, said it remains “focused on reaching a resolution of the national security risks” with TikTok and ByteDance. “We have been clear with ByteDance regarding the steps necessary to achieve that resolution,” she said.
Following Trump’s defeat in the US presidential election earlier this month, it is unknown whether an administration under president-elect Joe Biden would continue efforts to seek a restructuring of TikTok in the country.
But while TikTok’s future in the US remains uncertain, the company is looking to expand its presence in Ireland. The company announced this week that it plans to hire an additional 200 people in Dublin over the next three months, bringing its total headcount in Ireland to more than 1,100 by the end of January 2021.