Setback for ByteDance

Court: US law on the sale of TikTok is legal

Due to their proximity to the Chinese government, ByteDance and the TikTok app, which is particularly popular with young people, are suspected of espionage in numerous countries.

(Bild: stock.adobe.com, krone.at-Grafik)

TikTok has suffered a defeat in its fight against the US law on the sale of the popular short video app. An appeals court in the capital Washington declared the law to be legal. TikTok now has to appeal to the US Supreme Court.

In its lawsuit, the subsidiary of the China-based Bytedance Group argued that the law violates the freedom of speech enshrined in the US Constitution. However, the court pointed out, among other things, that the law was in line with long-standing regulatory practice and that the US Congress did not want to suppress certain statements.

According to the law, which came into force in April, ByteDance has around one year to separate from TikTok before the app is banned from app stores in the USA. The reason given is the risk that China could gain access to American data and exert political influence.

TikTok: Sale not possible at all
The TikTok lawsuit states, among other things, that it is "simply not possible", either commercially, technologically or legally, for ByteDance to remain in the USA as proposed by the law.

The law initially gave ByteDance 270 days to separate from TikTok. US President Joe Biden can then extend the deadline by three months if progress is made in the sales talks. However, TikTok made it clear that the company does not believe this will happen. "There is no question that the law will force the closure of TikTok on January 19, 2025," the lawsuit stated. According to media reports, ByteDance is not even planning to negotiate a sale of TikTok.

Donald Trump will be sworn in as the next US president on January 20. In his first term of office, he failed in court in an attempt to achieve a sale of TikTok. Most recently during the election campaign, he spoke out against a ban on the platform. However, he cannot override the law.

USA sees shadow of China behind TikTok
ByteDance is seen as a Chinese company across party lines in the USA. TikTok counters that ByteDance is almost 60 percent owned by Western investors. The company is based in the Cayman Islands in the Caribbean. However, US politicians counter that the Chinese founder has control thanks to higher voting rights with a share of around 20 percent and that ByteDance's headquarters are in Beijing, where it is impossible to escape the influence of the authorities.

At the same time, TikTok itself pointed out in the lawsuit that the Chinese government wanted to block the sale of the recommendation software developed in China as the core of the app. The algorithm decides which video is displayed next and reacts very sensitively to, among other things, how long a clip on a particular topic is viewed.

TikTok claims to have 170 million users in the USA.