On Friday, December 6th, the U.S. Court of Appeals, D.C. Circuit upheld a law that would force TikTok to divest from its parent company, ByteDance, or shut down TikTok in the United States by January 19, 2025. The U.S. Government has long been concerned about the national security risks that TikTok presents, including the risk that sensitive personal information will be collected and distributed to China, that the algorithm may be used to control American users’ viewing preferences, and certain content may be promoted or suppressed, which would in turn influence U.S. citizens.

Based on these concerns, the U.S. Government passed a law that would require ByteDance to sell its stake in TikTok or the platform would be forced to shut down in the U.S. by January of 2025. TikTok sued the federal government, citing that the law violates the First Amendment (right to free speech) and is unconstitutional.

In upholding the law as applied to TikTok, the federal appeals court cited “compelling national security interests” and that the U.S. Government had offered the “least restrictive” method for TikTok to solve this problem (i.e. divesture from ByteDance). They also stated that these measures would actually preserve U.S. citizens’ First Amendment rights, by protecting them from a “foreign adversary nation and to limit that adversary’s ability to gather data on people in the United States”. The court also stated that the company has never denied “that it collects a substantial amount of data on its users” or “that it has ever manipulated content on the TikTok platform at the direction of the [Chinese Government]”. TikTok has argued that a divesture of TikTok from ByteDance would be nearly impossible and is not necessary since the U.S. Government concerns are unfounded.

If the law does go into effect on January 19, 2025, all app stores would have to remove the app from their platforms, critical updates would not be provided, and the app would essentially be rendered useless. This obviously has major implications to TikTok users and creators, such as the fulfilling of TikTok shop orders and payments to creators who have earned revenue from the app.

This is certainly not the end of this case, as the Supreme Court is likely to hear it and make the final decision. In fact, TikTok has already asked the Supreme Court to delay the deadline of January 19th until the Supreme Court can weigh in on the constitutionality of the law and/or Donald Trump can stop it from being applied against TikTok/ByteDance. We are following this case closely and will continue to keep our clients updated in real time.

If you have any questions about TikTok, this case and/or how it may affect you, please contact us here.