TikTok Ban

A federal judge postponed a Trump administration order yesterday that would have banned one of the country’s most popular social media and entertainment apps, just hours before the TikTok ban was set to take place.

The judge, Carl Nichols of the U.S District Court for the District of Columbia, blocked Trump’s TikTok ban and granted a temporary relief for users, which comprise some one-third of Americans. The opinion of Judge Nichols, a Trump appointee, was issued under seal, so his exact reasoning for the order is not public.

In August, Trump threatened to ban the app from operating in the U.S., citing national security concerns. The president ordered that TikTok must either sell its U.S. operations to American companies or be barred from the country. He also had a few additional innovative ideas, all of which were shot down as illegal. 

TikTok challenged the ban as unconstitutional and a violation of due process.

“We’re pleased that the court agreed with our legal arguments and issued an injunction preventing the implementation of the TikTok ban. We will continue defending our rights for the benefit of our community and employees,” the company said following the ruling.

The Commerce Department said in a statement that it would comply with the injunction but did not say whether the government intended to appeal.

The Trump administration still believes that TikTik represents national security concerns that the Chinese government could use data gathered from the app to “track the locations of federal employees and contractors, build dossiers of personal information for blackmail and conduct corporate espionage”. 

However, the judge’s order did not block a much broader TikTok ban set to come into effect on November 12th, about a week after the presidential election, which could effectively make TikTok unusable. The reprieve will still give ByteDance time to conclude a deal to transfer ownership of the app.

Earlier this month, Microsoft (joined with Walmart) dropped out of negotiations with TikTok’s parent company Bytedance to purchase the app, after which it was reported that Oracle would partner with Walmart and become its technology partner and assume management of TikTok’s U.S. user data. 

Trump gave tentative approval to that proposed deal in which Oracle and Walmart could initially own a combined 20% of a new U.S. entity, TikTok Global. 

However, the deal remains unfinalized, and the two sides appear to be having disagreements over corporate structure.

Oracle and Walmart said that TikTok Global would be majority-owned by American investors.  “Americans will be the majority and ByteDance will have no ownership in TikTok Global,” Oracle said.

On the other side, Bytedance said it would retain an 80% stake in TikTok Global, and that there was no plan to transfer ownership of the valuable algorithms that power TikTok. 

Trump also said he could retract his approval if Oracle doesn’t have “total control” of the company. “They will have nothing to do with it. And if they do, we just won’t make the deal,” Trump said.

Similar to other disputes in the ongoing trade war between the United States and China, such as the Apple vs. Qualcomm saga, it appears untethering Chinese companies from Modern Day America may be a little more difficult than Trump thought.

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