Bloomberg Intelligence has put the odds of TikTok prevailing in the D.C. Circuit at 60%.
Chinese-owned social media app TikTok takes its fight against a U.S. ban to the next level in the American court system Monday.
The U.S. Court of Appeals for the D.C. Circuit will hear arguments against a new law signed by President Joe Biden banning TikTok unless its Beijing-based parent company, ByteDance Ltd., sells the popular video-sharing app. The company has vowed to challenge the ban all the way to the U.S. Supreme Court.
ByteDance, TikTok and a group of its users will argue to a three-judge panel that the law violates the Constitution’s First Amendment and would quash the free speech rights of its more than 170 million U.S. users. The Justice Department contends that TikTok is a national security threat because of its ties to the Chinese government but there have been growing tensions over whether the U.S. has enough public evidence to support its concerns.
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“The government has a number of significant challenges that they have to survive. Each one seems to be an uphill battle,” said Michael Forde, a lawyer who specializes in free-speech cases. “When you are balancing things like First Amendment rights, it is awfully tough for the government to say just trust us this is a significant threat.”
Some of the biggest tech competitors to TikTok are likely paying close attention to the case. A TikTok loss is expected to drive more users to Alphabet Inc.’s Google, Meta Platforms Inc. and Snap Inc., according to Bloomberg Intelligence. It could also hurt Oracle Corp., which provides internet hosting services to TikTok.
Bloomberg Intelligence has put the odds of TikTok prevailing in the D.C. Circuit at 60%, although the fight is unlikely to stop there and could proceed to the Supreme Court by the end of the year.
The company faces a tight deadline: if the court does not intervene, the ban is set to take effect on Jan. 19. TikTok and the Justice Department have requested a D.C. Circuit ruling by Dec. 6, with the case likely to reach the Supreme Court shortly thereafter.
The hearing on Monday will include three separate legal challenges to the divest-or-ban law: one by TikTok and ByteDance, one by a group of TikTok creators, and one by a conservative nonprofit organization that uses the app to promote its message. TikTok is bankrolling the content creators’ challenge.
The oral arguments on Monday will provide insight into how the appeals court regards the First Amendment’s application to online speech.
TikTok’s lawyers, including heavyweight Supreme Court litigator Andrew Pincus, are set to argue that the law would unfairly “allow the government to decide that a company may no longer own and publish the innovative and unique speech platform it created,” according to the company’s petition to the court.
But TikTok’s detractors – including the lawmakers who wrote the divest-or-ban law – say ByteDance doesn’t have constitutional rights because “it is a foreign incorporated holding company and in its brief asserts no operations within the United States.”
The Justice Department claims the Chinese government has the ability to require Chinese companies like ByteDance to gather intelligence on its behalf.
“Given TikTok’s broad reach within the United States, the capacity for China to use TikTok’s features to achieve its overarching objective to undermine American interests creates a national-security threat of immense depth and scale,” the Justice Department wrote in its court filing.
TikTok has questioned whether the government has evidence that China uses the app to collect information on Americans or influence their behavior.
The appellate panel is weighing whether the government can use classified information to argue its case without sharing it with TikTok. TikTok asked that a special master be appointed and that the law be put on hold if the panel lets the government use the secret documents.
The panel of judges that will decide that case includes Chief Circuit Judge Sri Srinivasan, who is an Obama-appointee; Neomi Rao, who was appointed by Donald Trump, and Douglas Ginsburg, a Ronald Reagan appointee.
—Bloomberg News
