TikTok challenges Trump order ahead of US divestment deadline

ByteDance has filed a legal petition challenging a White House order that would force a sale of TikTok’s US operations, citing delays from the Trump administration to finalise a deal that would satisfy national security concerns.

The Chinese owner of the short video app was given a 90-day deadline to address the concerns in an executive order signed by President Donald Trump in August.

ByteDance would be forced to sell TikTok’s US operations if it failed to do so by Thursday, according to the order.

The Chinese tech group said on Tuesday it had also filed for a 30-day extension on that deadline with the Committee on Foreign Investment in the US (Cfius), the inter-agency body overseeing the negotiations.

The company said it faced “continual new requests and no clarity on whether our proposed solutions would be accepted”.

“In the nearly two months since the president gave his preliminary approval to our proposal to satisfy those concerns, we have offered detailed solutions to finalise that agreement — but have received no substantive feedback on our extensive data privacy and security framework,” TikTok said.

Mr Trump has alleged TikTok shares data with the Chinese government. The company denies the claim.

The White House and the Treasury, which chairs Cfius, did not comment.

ByteDance announced in September that it would partner with Oracle, the Silicon Valley tech group, and retailer Walmart to address Mr Trump’s concerns and would set up a new TikTok Global entity to be headquartered in the US. Mr Trump gave his preliminary approval to the deal.

However, the parties later appeared to disagree over whether ByteDance would retain a majority ownership stake in the new entity, drawing a rebuke from the president.

Some ByteDance investors have expressed optimism that Joe Biden, US president-elect, may not hound TikTok as aggressively as his predecessor.

But a 30-day extension to the Cfius deadline would leave a short gap before Mr Biden’s administration is inaugurated on January 20.

“If there is [an] indication of positive progress and that the parties have been earnestly trying to meet the deadline, the usual inclination of the committee would be to grant that extension of time,” said Aimen Mir, a partner at Freshfields, the law firm, and a former top official at Cfius.

One person involved in the talks said Mr Trump’s approach to TikTok had been “incredibly disruptive” and predicted that Cfius would be “normalised” under Mr Biden.

“The goal is to address national security and not to make it about one company or the other,” the person said. “That’s good for everyone involved.”

Last month, three “creators” on the TikTok platform successfully persuaded a federal judge in Pennsylvania to grant an injunction against a separate White House executive order that would have effectively banned the app in the US beginning on Thursday.

TikTok is also trying to persuade a judge in Washington to block that same order in a separate lawsuit on the grounds that it oversteps the powers of the International Emergency Economic Powers Act.

The outcome of TikTok’s sale process will represent an important ruling on the “open internet” model the US had previously embraced, said Lindsay Gorman, a fellow at the Alliance for Securing Democracy, an advocacy group.

“This is really a referendum on whether that model can continue to exist, or whether we’re going down the path of cyber sovereignty,” Ms Gorman said.

Additional reporting by Demetri Sevastopulo in Washington

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