The luck of TikTok, a unit of ByteDance, is under uncertainty because of a bill signed by Biden.
This bill was signed at the feet of US leader Biden on April 24th. In the relevant items, ByteDance was limited to its US business for about nine months, otherwise it would face the US World ban. Furthermore, if Biden is certain that the sale of the product has not been halted due to the turmoil, he has refused to exercise a 90 day rescheduling right.
TikTok and its chief executive, Minzhou Shouzhi, did not respond strongly to this and vowed to take action through legal means.
In order to further understand whether TikTok can adopt legal measures to fight against “encroachment” and the various achievements that have not been faced, whether good or bad, on April 28th, Interface News interviewed Lawyer Wei Dongdong, a lawyer familiar with relevant US laws and a partner in the field of data violation in the Huiye Law Firm, to analyze the ongoing direction of TikTok’s turmoil.
In fact, the US authorities have repeatedly banned TikTok, but in Wei Dongdong’s view, this bill is more rigorous and comprehensive than before, “the highest level of action.”
It is different from the bans experienced by TikTok in 2020 and 2023. It is not a separate TikTok ban bill, but is packaged in an HR815 with nearly 20 bills. The HR815 goal is to provide emergency supplementary funding for the financial year ending September 30, 2024, and use it for other purposes, with a funding amount of up to $95 billion.
Drawing: Interface News Reporter
This approach “hides its meaning”. It should be noted that before the HR815 bill, there is currently more urgent funding turmoil related to Israel and Ukraine in the United States. The “Use of French Invasion Act that harms Americans from being controlled by their own enemies” (hereinafter referred to as the “TikTok Act”) targeting TikTok is only listed in item 8. This kind of packaging can make the bill more discriminatory and pass faster.
The reality is indeed like this. Since the beginning of March, when several members of the House of Representatives proposed it, the TikTok bill has gone through multiple stages in just over a month and has been handed over to Biden’s desk. And almost every time the vote is passed quickly with overwhelming dominance. According to media evaluations, this was a lightning strike.
The goal of the TikTok Act is to increase the shares of the company held by Chinese entities (including options held by Chinese employees) to below 20%, and Chinese entities cannot have control. The method to achieve this goal is to divest TikTok’s US operations, with a implementation period of 270 days (approximately 9 months). According to the statement of TikTok, the company is now wholly owned by ByteDance.
Wei Dongdong analyzed the two major differences between this bill and the previous one: firstly, in the United States, it was passed by the Senate and the House of Representatives, known as the judiciary, and once passed, it became a public law. The order issued by the leader is called the Yanzheng Order, which does not require passing the parliamentary assessment and is only ineffective for the authorities and citizens, and does not directly affect the public. But if the judicial and political orders are filed for unconstitutional prosecution, the court will not determine their validity.
In 2020, Trump signed a speech order, and TikTok successfully filed a legal lawsuit, with the court announcing a temporary suspension of implementation. In 2023, the state of Canada also passed a ban on TikTok within the state, but the final decision was the successful appeal of TikTok.
The TikTok bill announced this time belongs to the judicial system implemented on a global scale, with stronger efficiency and wider scope.
Second, the TikTok Act is more rigorous in terms of language and text. It does not allow users to download TikTok or stop business with TikTok/ByteDance, but “allows the market and Internet hosting service providers to provide services for” domestic competitors to master the use of “. If the service providers provide services, they will be fined. The bill does not even name TikTok, but only excludes TikTok and related companies separately when defining the “application methods mastered by domestic enemies.”.
Image: Original text of HR815 bill
The bill has no bottom line provisions yet. The application methods of domestic enemy foot control are defined as two categories. The first category is TikTok and its related companies, and the second category is “significant threats to US national security posed by domestic enemy foot control and the release of relevant orders by major leaders.”.
Wei Dongdong expressed that if the court determines that the first type of entry is valid, the second type still has efficiency, and the authorities still have “twists and turns” to prove that TikTok belongs to the second type of use, thereby achieving the goal of ban.
Obviously, after several setbacks in lockdowns, the US authorities have “optimized” their legal weapons, and what is TikTok’s chances of winning this lawsuit? What kind of journey will you go through again?
Wei Dongdong analyzed the information on the interface. As for the time of the complaint, whether ByteDance can now complain to the Court of Appeal for Complaints in the District of Columbia (the court has exclusive jurisdiction over this bill), but it is estimated that the complaint will not be filed immediately, and whether it can stop in the second half of this year or the end of this year. Is it possible to request the court to preliminarily allow the implementation of the law, namely a temporary injunction, during the trial of the case when filing a complaint. Whether it can ultimately be appealed to the Federal Supreme Court.
She exaggerated that the temporary ban did not allow her to compete for time, and even if she lost the first trial, she could still file an appeal. During the trial process, TikTok had the opportunity to inherit the operation.
Regarding the reasons for filing a lawsuit, Zhou Shouzi has repeatedly mentioned in his response video that “it harms the right of 170 million Americans to speak freely”, which is also the legal basis that TikTok has invoked several times in previous years, namely the right to freedom of speech guaranteed by the US Constitution.
However, Wei Dongdong pointed out that “the harm caused by courts to freedom of speech is not unlimited, and it needs to be weighed to determine how much persecution TikTok will cause to national security, and how much effect the ban on TikTok will have on freedom of speech. The legal community needs to weigh these two costs and whether the justice of freedom of speech can be balanced.”.
In addition, based on the uncertainty of the stripping price, can TikTok file a lawsuit claiming that the law has encroached on TikTok’s private property in China and complies with the constitution. The Supreme Court of the United States once applied a rule in the case of Yanston Steel Company v. Sawyer, but based on TikTok’s successful history of using freedom of speech to respond to US bans and obtaining support from TikTok users, Wei Dongdong argued that the possibility of using freedom of speech to appeal was greater in response to the lawsuit against TikTok users.
During this period, both TikTok and the authorities were able to mobilize the public and lobby political parties. Just like TikTok once ordered users to call Congress through pop-up commands, perhaps more ordinary American users will file complaints in the future to exert pressure on the authorities with their speech power. And the reason for ordinary users to file complaints is not only limited to freedom of speech, but also whether it can damage the benefits of the property management, and so on.
The best outcome for litigation is the court’s assessment of the overall effectiveness of the bill. In addition, there are many possibilities, such as whether the Legislative Yuan does not support individual provisions in the bill, whether TikTok can inherit and appeal, and whether TikTok can inherit and operate within the 270 days (or extended to 1 year) specified in the bill. Whether or not TikTok can inherit the operation at this moment depends on whether it can obtain a temporary injunction from the court on the bill.
The worst-case outcome is that the court fully supports the bill, and TikTok will be requested not to be sold to a US company. Judge Wei exaggerates that the restraint is often “penetrating”, and even if ByteDance is used to hold shares or master them in other situations, it will not be detected.
But in reality, this means that the United States is banning TikTok. Because the option of “not available” is not in ByteDance’s consideration. ByteDance was clearly unveiled on April 25. The foreign media had nothing to do with the false news that it had found out that TikTok was not sold, and the company did not have any plans to sell TikTok.
The bill has yet to yield another result, which is the large scale of the definition of “the use of methods controlled by domestic enemies”. Can this give US regulatory agencies too much power to arbitrarily expand the ban tool to other Chinese companies, and even all non US domestic companies?
Lawyer Wei believes that in the short term, the focus of the US authorities is on national security. Based on previous Cambridge analysis, the US authorities are particularly concerned about TikTok’s role in the upcoming US presidential election and social discourse, making it a target of criticism. Wechat, which uses instant messaging software, has also received equal compensation. The pressure on e-commerce software does not come from the national level. The accusations they are currently facing are focused on trade, such as improper discounts, infringement, etc., which belong to “companies fighting on their own”.
But in the long run, there is a risk of expansion after the bill is passed. This is a blackmail for all companies.
Due to multiple factors such as domestic involvement, the regulatory positions of authorities in various countries towards domestic companies vary. For example, in Europe, the EU’s focus on controlling foreign companies is mainly on data privacy rather than national security.
The lawyer reminds companies to “do as the Romans do when in Rome” when facing difficulties and investing. They should delay getting to know the local rules and regulations, conduct forward-looking research on local legislation and legal development, make trade decisions based on different regional regulatory priorities and product categories, and continuously pay attention to local regulatory and legislative developments during the operation process.