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ByteDance challenges Trump administration's TikTok sale order in Appeals Court

The Trump administration contends TikTok poses national security concerns as the personal data of U.S. users could be obtained by China's government

twitter-logoReuters | November 11, 2020 | Updated 08:09 IST
ByteDance challenges Trump administration's TikTok sale order in Appeals Court
Trump administration's order was based on a government review of ByteDance's 2017 acquisition of U.S. social media app Musical.ly, which ByteDance merged into TikTok

ByteDance, the Chinese parent company of video-sharing app TikTok, filed a petition late on Tuesday with a U.S. Appeals Court challenging a Trump administration order set to take effect on Thursday requiring it to divest TikTok. President Donald Trump in an Aug. 14 order directed ByteDance to divest the app within 90 days, which falls on Thursday.

"Facing continual new requests and no clarity on whether our proposed solutions would be accepted, we requested the 30-day extension that is expressly permitted in the August 14 order," TikTok said in a statement. "Without an extension in hand, we have no choice but to file a petition in court to defend our rights," the company said. The White House and Treasury declined to comment. The Justice Department did not immediately comment.

The Trump administration contends TikTok poses national security concerns as the personal data of U.S. users could be obtained by China's government. TikTok, which has over 100 million U.S. users, denies the allegations.

The petition names Trump, Attorney General William Barr, Treasury Secretary Steven Mnuchin and the Committee on Foreign Investment in the United States (CFIUS), the inter-agency panel that reviews certain transactions involving foreign investment on national security concerns.

It says the CFIUS action and Trump order "seek to compel the wholesale divestment of TikTok, a multi-billion-dollar business built on technology developed by" ByteDance "based on the government's purported national security review of a three-year-old transaction that involved a different business."

That order was based on a government review of ByteDance's 2017 acquisition of U.S. social media app Musical.ly, which ByteDance merged into TikTok. Separate restrictions on TikTok from the U.S. Commerce Department have been blocked by federal courts, including restrictions on transactions that were scheduled to take effect Thursday that TikTok warned could effectively ban the app's use in the United States.

Talks have been ongoing to finalize a preliminary deal for Walmart Inc and Oracle Corp to take stakes in a new company to oversee U.S. operations. Trump has said the deal had his "blessing."

Also read: Google Pixel 4a review: A compact smartphone best as a secondary device

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