The app took the US government to court on Monday, accusing the Trump administration of not following due process in its attempt to divest the company.
Legal action appears to be the last resort for the embattled company as it fights to stay in business in the United States.
“We do not take suing the government lightly; however we feel we have no choice but to take action to protect our rights, and the rights of our community and employees. Our more than 1,500 employees across the US pour their hearts into building this platform every day,” the company said in its suit, adding that it has plans to expand its workforce across eight states with more than 10,000 workers.
The New York Times reported that the suit was filed in the Federal District Court for the Central District of California. TikTok is arguing that Trump’s Executive Order is unconstitutional because it failed to give the company an opportunity to respond.
Procedures for actions like this involve federal notification. If the federal government launches an investigation, it will inform the company with a subpoena or some other means, demanding its response to the allegations. However, TikTok’s legal team said no such notification was served by the US government, and it breaches the standing procedure.
But TikTok’s ordeal stems from Trump’s administration’s concern that the Chinese government will harvest the data of its American users. TikTok is owned by Chinese company ByteDance, which the US government believes to be under the control of the Chinese Communist Party, and wouldn’t refuse any data request made by the Chinese government.
The situation has turned into a political dogfight between the United States and China. As national security concerns escalate the existing trade conflict between the superpowers, the recent US clampdown on Chinese tech companies fuels the tussle. The Trump administration is trying to prove how tough it can be on China, while Beijing is determined to be more assertive.
But the consequential impact is reckoning on Chinese tech companies only. Huawei was the first victim of the contagious fight that has got many other nations involved, and subsequently TikTok and WeChat. The United Kingdom, Canada, India among others have followed the US to part ways with Huawei’s 5G technology infrastructure, and the move is forcing other countries to reconsider their relationship with the Chinese telecom giant.
While the restrictions on the Chinese tech companies will have a significant impact on US companies and jobs, it paves the way for the United States to curtail the seeming dominance of China in technology.
TikTok has millions of users in the US and so does WeChat, a ban will mean that they will lose one of their biggest revenue bases.
As more US companies become interested in acquisition of TikTok, the company is seeking an alternative through suit. If the court rules in its favor, it means it will not have further need to be acquired by US companies. But that seems unlikely as the matter involves national security.
Last year, Huawei sued the US government over a spending law that prohibited federal agencies and contractors from using its equipment. The suit claimed that the company’s constitutional rights have been violated. But the court ruled in favor of the US government.
The International Emergency Economic Powers Act empowers the US president to regulate economic transactions in a national emergency. It was based on that provision of the law that Trump issued the executive order to ban TikTok.
Jason M. Waite, a partner at the law firm Alston & Bird, said that courts would probably be reluctant to challenge the president on national security grounds.
“I do think the US should be concerned about having to defend IEPPA actions and the impact that could have on the authority of a future president,” he said.
If the court rules in favor of TikTok, it means that the powers of the presidency to invoke IEPPA have been undermined.
Therefore, TikTok’s lawsuit can only serve one purpose – buy more time for the company to entertain more bidders. Microsoft is in a race to seal the acquisition deal before Trump’s deadline, but Twitter and Oracle have joined the bidding too.