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.
The Chinese owner of the short video app was given a 90-day deadline to address national security 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.
The petition, filed in the US Court of Appeals for the District of Columbia, asked for a court to review Mr Trump’s divestment order, arguing it violated the company’s constitutional rights.
The Chinese tech group said it had also filed for a 30-day extension to the 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 said in its petition it had submitted a new proposal this month that discussed restructuring TikTok US as a new entity wholly owned by Oracle, the Silicon Valley tech group, Walmart, the retailer, and ByteDance’s US investors.
The Chinese company announced the partnership with Oracle and Walmart in September. Under the deal, which received Mr Trump’s preliminary approval, the new entity would be headquartered in the US and would oversee American user data and content moderation.
However, the parties later appeared to disagree over whether ByteDance would retain a majority ownership stake in the new entity, drawing a rebuke from Mr Trump.
Some ByteDance investors have expressed optimism that Joe Biden, US president-elect, may not hound TikTok as aggressively as Mr Trump.
But a 30-day extension to the Cfius deadline would leave a short gap before Mr Biden’s administration is inaugurated on January 20.
ByteDance’s lawyers said they would file a motion to stay Mr Trump’s order “only if discussions reach an impasse and the government indicates an intent to take action to enforce the Order”.
Aimen Mir, a partner at Freshfields, the law firm, and a former top official at Cfius, said: “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.”
One person involved in the talks said Mr Trump’s approach 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 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