TikTok Ban: Supreme Court Case Begins, Billionaire Bids For App

The US Supreme Court will begin hearing arguments on Friday in a case that would determine the fate of short-video app TikTok in the country.

TikTok and its Chinese-parent ByteDance have called on the court to halt a law requiring divestiture of the app’s US operations by January 19. Without such separation, the app will face a ban in the US.

The law was passed by Congress with strong bipartisan support last year and signed by outgoing Democratic President Joe Biden, whose administration is defending it in the case.

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ByteDance and TikTok have maintained that selling off US operations was not possible, as it would be a complicated and costly process which will also be prohibited by the Chinese government.

As a result, TikTok will cease operations in the US on January 19 — a day before President-elect Donald Trump’s inauguration — the app has said.

Its lawyers say the resulting ban on the app will be a violation of the rights to free speech of not only TikTok and its 170 million American users, but “the entire nation.”

The platform represents “one of the most significant speech platforms in America,” TikTok and ByteDance said in a filing, adding that the law is “at war with the First Amendment.”

“Rarely if ever has the court confronted a free-speech case that matters to so many people,” lawyers for some TikTok users, who have also moved the court, said.

Several free-speech advocates in the US have made similar arguments as well, voicing concern about the potential ban on the app.

“This is the most significant free speech case in at least a generation,” Timothy Edgar, a former US national security and intelligence official, told Reuters.

“If we consider that there are 170 million active monthly users of TikTok in the United States, the volume of free speech at risk is the largest of any Supreme Court case in American history,” added Edgar, who now teaches cybersecurity at Brown University and joined a brief backing TikTok in the case.

Consortium bids to buy app

Meanwhile, a day before Supreme Court hearings were set to begin, US billionaire Frank McCourt’s Project Liberty and its consortium of partners in The People’s Bid said they proposed to make a formal bid to ByteDance to buy TikTok’s US assets.

The consortium, which did not disclose the value of the proposal, said the financial capacity to complete the deal included expressions of interest from investors – including major private equity funds, family offices, and high net worth individuals – for sufficient equity capital, as well as debt financing from one of the largest banks in the United States.

McCourt and his firm Project Liberty formed the consortium last year to buy social media platform TikTok in the United States.

“By keeping the platform alive without relying on the current TikTok algorithm and avoiding a ban, millions of Americans can continue to enjoy the platform. We look forward to working with ByteDance, President-elect Trump, and the incoming administration to get this deal done,” McCourt said in a statement.

The Trump factor

Whether incoming president Trump will allow the app to be banned in the US remains to be seen. Trump has previously said he has a ‘warm spot’ for TikTok in his heart.

The app is believed to be key to amassing a large young voter base for Trump, effectively playing a key role in his victory.

Trump promised on his campaign trail he was not going to let the app be banned. Last month, he also called on the Supreme Court to put a hold on the January 19 deadline for divestment to give the incoming administration “the opportunity to pursue a political resolution of the questions at issue in the case.”

The US Justice Department, meanwhile, urged the court to reject that request.

The Justice Department has said the law targets control of the app by a foreign adversary, not protected speech, and that TikTok could continue operating as-is if it is freed from China’s control.

No one disputes that China “seeks to undermine US interests by amassing sensitive data about Americans and engaging in covert and malign influence operations,” the department told the court in a filing, calling the app “a powerful tool for espionage.”

Trump’s views supporting TikTok are also at odds with his fellow Republicans, many of whom support the ban.

These diverging views raise the stakes for the Supreme Court, which has a 6-3 conservative majority.

Reuters, with additional editing and inputs from Vishakha Saxena

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]