Biden signed, how much room is there for TikTok to litigate?

虎嗅APP

2024-04-25 21:51Posted on the official account of Beijing Tiger Sniff APP

Produced by Tiger Sniff Commercial Consumer Group

Author|Zhou Yueming

Editor|Miao Zhengqing

Visual China

Biden signed. The TikTok bill was passed at a flying speed.

这项法案与众议院3月份提交的《保护美国人免受外国对手控制应用程序侵害法》（Protecting Americans from Foreign Adversary Controlled Applications Act）有很大不同。

The bill, known as the 21st Century Peace through Strength Act, was accompanied by $95 billion in foreign aid. The House of Representatives tied the bill against TikTok to a series of geopolitical bills such as U.S. aid to Ukraine and Israel, sanctions against Iran, and Russia.

The bipartisan dispute over foreign military aid in the United States has been going on for months, and the regulations against TikTok are more like "stuffed in."

Let's review the process of signing quickly:

On April 20, local time in the United States, the House of Representatives passed the bill by an overwhelming vote of 360 votes to 58 votes, and it was a big Saturday that day, and it was rare for almost all members of the House of Representatives to collectively work overtime on Saturday to vote (the last time was on September 30, 2023, to discuss the federal government budget). If the House of Representatives doesn't make a decision soon, the federal government will shut down.)

On April 23, the Senate voted 79-18. In contrast, the PAFACA bill submitted by the House of Representatives in March is still not scheduled for consideration by the Senate, and according to foreign media reports, the bill has been shelved.

On April 24, Biden signed the bill. Previously, Biden had said that if the TikTok-related bill was submitted to the White House, he would sign it immediately.

It is worth noting that after Biden signed it, TikTok issued a statement saying: This unconstitutional law is a TikTok ban, and we will challenge it in court. We believe that facts and law are clearly on our side and that we will win in the end.

The bill is more elaborate

According to industry insiders, the bill signed by Biden this time is much more elaborate on TikTok.

"Congressional legislators are prepared for the legal challenges they may face. Huang Minda, a practicing lawyer in New York and California, who is proficient in the political and legal environment of the United States, told Tiger Sniff.

According to its analysis, first of all, their bill is not directly "banned" from TikTok in terms of wording, but prohibits app stores and internet hosts from providing services for "foreign adversary-controlled apps". TikTok can be exempted from this requirement if it completes the "divestiture". The bill as a whole does not use sensitive words such as "shutdown" or "ban".

In addition, they specifically mentioned in the article that if some clauses are found by the court to be invalid, the validity of other clauses will not be affected.

In the bill signed by Biden, the definition of "foreign adversary-controlled apps" includes two categories: (1) apps controlled by ByteDance, TikTok and their affiliates, and (2) apps that meet the scale criteria, are controlled by foreign adversaries, and the president considers to be a significant national security risk.

Combined with the clause that "if some clauses are found invalid by the court, the validity of other clauses will not be affected", even if the clause of the direct name section jump and TikTok are found invalid or suspended by the court during the litigation process (relatively speaking, it is more likely that this clause will be found invalid or suspended by the court, because it is directly aimed at a specific company's legislation, or involves "prior judgment"), then the rest of the clauses will still be valid.

In the bill, the "application that meets the criteria of scale, is controlled by a foreign adversary, and is considered by the president to be a significant national security risk" is very broad.

"Eligible for scale": Apps with more than 1 million monthly active users, users who can register an account, and publish social content (whether text, images, videos, instant messaging) meet this requirement.

"Foreign adversary control": A company whose headquarters or principal place of business is in China, or where a Chinese individual or company holds more than 20% of the shares, or is controlled by the former two.

"Applications that the President believes present a substantial national security risk": are at the sole discretion of the President and only need to satisfy the prior notice procedure.

This could widen the "attack surface" of the bill.

"The bill is not only aimed at TikTok, theoretically all social media owned by Chinese individuals or companies holding more than 20% of the shares may be forcibly divested or banned, and even some non-social media with social attributes may fall within the scope of the bill. Huang Minda said.

This means that other apps with social attributes in China will have certain risks, and in the future, the United States can open a knife to any Chinese app with social attributes.

For TikTok, there may be several follow-up directions: first, TikTok wins the case entirely, and the court finds the bill invalid as a whole, or issues an injunction to suspend the implementation of the entire case; second, TikTok loses the case entirely, and the court finds the bill valid as a whole and refuses to issue an injunction; third, TikTok partially wins the lawsuit, and the court suspends the implementation of some provisions (such as the terms of direct name section jumping and TikTok) and allows the implementation of other terms.

For both the first and second cases, the results are clear. If TikTok loses the case, even if the next president intends to change course, it will not be able to violate clear legislation in Congress.

In the third case, there is the possibility of negotiation and compromise. For example, if the provisions of the bill that directly name and TikTok are suspended, and apps that meet the requirements of "the president believes that there is a significant national security risk" will be forcibly divested, the president has the authority to decide whether to continue to push for TikTok's forced divestment.

In addition, "the terms have already hinted at the conditions that the United States gave TikTok for the divestiture." Huang Minda said. According to the aforementioned provisions of the bill, as long as ByteDance relinquishes its stake in TikTok and is controlled by a U.S. entity, the U.S. has no objection to Zhang Yiming or other Chinese investors holding no more than 20% of the shares in the new TikTok structure as financial investors.

However, according to industry insiders, Tiger Sniff: "If the bill finally comes into effect, due to international political reasons, the probability that TikTok will choose to sell is not high." ”

What are the possible points of action?

According to TikTok's statement: "This unconstitutional law is a TikTok ban, and we will challenge it in court." ”

According to the bill, TikTok has the right to file a lawsuit in the Washington, D.C. Court of Appeals within 165 days of the bill being passed. If calculated according to this time, TikTok needs to file a lawsuit by early October 2024 at the latest.

You know, this is not the first time TikTok has taken an appeal. Back in 2020, during Trump's presidency, TikTok officially filed a lawsuit against Trump's executive order in federal court in California.

So how does this lawsuit compare to the 2020 one?

First of all:

At that time, President Trump's ban on TIkTok was based on the authorization of the International Emergency Economic Powers Act (IEEPA) in the United States. Huang Minda said.

该法允许美国总统对“非同寻常的海外威胁”（unusual and extraordinary foreign threat）采取应对措施，以保障美国的国家安全。 但IEEPA明确规定，总统的该项权限不得规范或禁止私人通讯（personal communication）或其他交换信息的媒介。

In the 2020 lawsuit, the court granted a temporary injunction prohibiting the implementation of the law, primarily on the basis that the Trump administration's executive order indirectly regulates private communications and speech beyond the authorization of the IEEPA.

This time, it was Congress that legislated separately to strip or disable TIkTok, and the U.S. government no longer needs to be authorized under the IEEPA, and is therefore not limited by the scope of the IEEPA's authorization.

This circumvents the challenge of the previous TIkTok lawsuit that went beyond the IEEPA's mandate. Huang Minda told Tiger Sniff.

Second:

In 2020, the Trump administration's order directly used the wording to prohibit any transactions with ByteDance, while this legislation calls forced divestiture, and only if the forced divestiture fails, there will be a ban problem. Even if TIkTok files a lawsuit for an interim injunction, the U.S. government can argue that TIkTok is not in immediate risk of being banned and that no court will need to grant an injunction for it.

Third:

In this legislation, the applications that need to be forcibly divested are divided into two categories: the first category is companies controlled by ByteDance or TIkTok, and the second category is the application controlled by foreign adversaries that meet a certain scale condition and the president considers to have a significant national security risk.

In the Act, there is a provision specifically mentioning that if some provisions are found to be invalid by the court, the validity of the other provisions will not be affected. Then, even if the first category is invalid for any reason, the president may still rely on the second category to demand a mandatory divestment or ban of TIkTok.

So, for ByteDance, what points can this lawsuit have to challenge the legitimacy of the bill?

Many people in the industry have made analyses, for example, whether the bill is contrary to the First Amendment (free speech) of the Constitution, or the Fifth Amendment (due process), and in addition, the bill directly mentions the names of "ByteDance, TikTok", or it also conflicts with the bills of attainder (pretrial judgment clause) in US law.

However, TikTok has not yet made the complaint public, and the specific status of the lawsuit still needs to be further disclosed.

It is worth noting that after market rumors, TikTok was ready to fire Erich Andersen, the company's and ByteDance's general counsel in the United States, who had led communication with the U.S. government for years to deal with the latter's concerns and allegations about "national security", but the results were not satisfactory. It is also reported that Anderson has informed other executives that he is ready to resign, but will stay in the company until a suitable successor is found.

But recently, a TikTok spokesperson said when asked if the company would remove Anderson: "This is 100% untrue. ”

Because it is in the critical period of the general election, American politics is going treacherous.

Trump, who banned TikTok back then, has shown a very different attitude as a candidate for this year's presidential election.

On April 22, he publicly stated on social media that "it is Biden who is pushing for the closure of TikTok" and "Biden needs to be fully responsible if the TikTok ban is implemented", and Trump also directly shouted to young people, "Young people, including most others, must remember this during the November 5 election in the United States!" "He (Biden) is destroying our country, which is a major threat to democracy." ”

It should be noted that the bill extends the period for the divestment of TikTok from 165 days to 270 days, and the White House can also exercise the power to extend the period by 90 days if the president determines that the sale is progressing. This extended the maximum period for ByteDance to sell TikTok to one year.

And then take legal action, if the court issues an injunction as requested by TikTok, it may further delay the time.

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