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TikTok said it has worked with the Committee on Foreign Investment in the United States (CFIUS) to address national security concerns. Photo: AP

TikTok says it has filed a legal challenge against Trump’s August 14 divestment order to defend rights

  • US President Donald Trump in an August 14 executive order directed the app’s Chinese owner ByteDance to divest TikTok before November 12
  • TikTok said it has worked with the Committee on Foreign Investment in the United States (CFIUS) to address national security concerns
TikTok

TikTok, the short video app whose fate in the US depends on a forced sale that is still pending approval, said one day before the deadline for a deal to be done that it “has no choice but to file a petition in court to defend our rights and those of our more than 1,500 employees in the US.”

US President Donald Trump in an August 14 executive order directed the app’s Chinese owner ByteDance to divest TikTok before November 12 for national security reasons, unless the deadline is extended for a period of no more than 30 days.
TikTok said on Wednesday that it has not been granted the 30-day grace period that it requested. With the Thursday deadline imminent, it has no alternative but to file a petition to court, it said in a statement on its Twitter account.

TikTok said it has worked with the Committee on Foreign Investment in the United States (CFIUS) to address national security concerns. “We have offered detailed solutions to finalise that agreement – but have received no substantive feedback on our extensive data privacy and security framework.”

In a proposed deal agreed in September, ByteDance will form a US- based entity with new shareholders Oracle and Walmart, with the former taking a 12.5 per cent stake in the new entity [which will store all its US data to comply with US national security requirements] and Walmart holding 7.5 per cent. ByteDance and some of its current US investors will remain as a majority shareholder.

TikTok owner ByteDance on hiring spree in China amid US troubles

Amid a widening tech war between the US and China, the deal has faced an uphill struggle in securing approval from both Beijing and Washington, neither of which wants to lose face in the high stakes battle. China’s export control list, which added two key technologies used by TikTok in late August, has further complicated the deal.
ByteDance said in late September that it had applied for a technology export licence that would take up to 45 working days to be approved, but there has been no update since then. Meanwhile, Trump will remain as president until January 20, with analysts saying that a Joe Biden presidency is unlikely to change the direction of current US-China tech relations.
In response to an earlier executive order on August 6, the US Commerce Department announced it would prohibit the download or update of TikTok by September 20 – but this was halted by a US judge in Washington before it took effect.

The Commerce Department also said it would stop US companies from offering internet hosting, content delivery networks, internet transit or peering services to TikTok, or using the app’s code in other software or services. The deadline for this was November 12. However, this ban was also halted by a judge in Pennsylvania late last month in a case brought by TikTok’s content creators.

The US Commerce Department said earlier this month that it would “comply with the injunction” but “vigorously defend” the executive order signed by Trump on August 6.

Earlier in September, a US judge also temporarily blocked transaction and download restrictions placed on Tencent Holdings’ WeChat app by the Commerce Department, that were to take effect on September 20.

This article appeared in the South China Morning Post print edition as: Video app TikTok to defend its rights in court over sale
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