TikTok Takes a Stand, Stating Intent to Sue Trump Over Ban

Next week, TikTok plans to file a suit against the Trump Administration over its executive order to block the app, claiming that it has been “unfairly and incorrectly treated as a security threat.” TikTok spokesperson Josh Gartner noted that, “for nearly a year we have sought to engage in good faith to provide a constructive solution … what we encountered instead was a lack of due process.” TikTok is also trying to encourage its 1,500 U.S.-based employees, while putting aside plans to hire 10,000 more and open new offices.

The New York Times reports that, on August 6, Trump issued an executive order to ban transactions with the app within 45 days and, a week later, issued another order giving ByteDance 90 days to “divest from its American assets and any data that TikTok had gathered in the United States.”

The first order “draws its legal authority from the International Emergency Economic Powers Act, which allows the president to regulate economic transactions in a national emergency,” although it has never before been used against a global technology company. Alston & Bird partner Jason Waite said, “the order raised serious questions, including whether the provision could be used to target people or companies registered in the United States, even if they had a foreign parent company.”

Microsoft and Oracle are among TikTok’s suitors, both of which remain in conversations with the Chinese-owned app. ByteDance has consistently denied it poses a security threat to the U.S., “but as the White House’s actions escalated, TikTok became more critical of its moves.” Trump also ordered WeChat to cease operations in 45-days, but “dozens of American companies rely on partnerships with WeChat and Tencent to do business globally; a cancellation of the service in the United States could disrupt corporate America.”

Bloomberg reports that, at TikTok, in addition to employee concern, advertisers and “social media stars are inserting clauses into their contracts to address what happens if a proposed ban comes to pass.” Some TikTok celebrities are urging their followers to decamp to Instagram. Company virtual town halls, once monthly, are now taking place every week. TikTok technical program manager Patrick Ryan is “leading a crowdfunding campaign to fund an employee lawsuit against the proposed ban, though he said he is not involved in the company’s official legal response and speaks only for himself.”

TikTok debuted its largest-ever ad campaign this week, with TV, radio and social media ads pitching the company as “a positive force” in the U.S. Some employees point out that their concerns about getting paid after September 15 is “bizarrely disconnected from TikTok’s rising revenue and exploding user base.”

Sensor Tower said the company surpassed the 2+ billion total download mark in April and “has continued to outpace other social media apps.” The company also vowed to create 10,000 U.S. jobs, “from engineers and ad sales to communications and public policy staff.”

Engadget reports TikTok is concerned over Trump’s executive order banning activities that aren’t “an unusual or extraordinary threat,” a prerequisite of the International Emergency Economic Powers Act, which has been “cited by the administration for justification of the ban.”

The TikTok vs. Trump Battle Continues With a Lawsuit, Recode, 8/24/20
TikTok Sues Trump Administration Over U.S. Ban, Calls It an Election Ploy, Reuters, 8/24/20
Exclusive: ByteDance Investors Seek to Use Stakes to Finance TikTok Bid, Reuters, 8/24/20
Facebook CEO Mark Zuckerberg Stoked Washington’s Fears About TikTok, The Wall Street Journal, 8/23/20
How One CEO Dealt With the TikTok Taunts of Gen Z: He Hired Them, The Wall Street Journal, 8/23/20

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