TikTok's Legal Battle: US Court Weighs Free Speech Concerns Against National Security

TikTok's Future Hangs In Balance As Judges Express Skepticism In US Court Battle

ByeDance-owned TikTok, the widely-used social media platform for creating and sharing short-form videos, has encountered a doubtful panel of judges. What Happened: TikTok and a group of creators are contesting a law, often referred to as "the TikTok ban," in front of a three-judge panel at the DC Circuit Court of Appeals. During oral arguments on Monday, the judges, Chief Judge Sri Srinivasan, Judge Neomi Rao, and Judge Douglas Ginsburg, seemed to scrutinize TikTok's counsel more rigorously than the U.S. Department of Justice, reported The Verge. The law mandates TikTok to separate from its Chinese parent company, ByteDance, by Jan. 19. TikTok contends that this ban would stifle its creators and limit the information accessible to Americans. See Also: Huawei Might Be Giving Apple A Run For Its Money In China, But Replacing The Tri-fold's Screen Could Cost You An iPhone Worth Of Cash DOJ upheld the law, asserting it as a necessary step against a company seen as a national security threat due to its alleged connections to a foreign government. The judges questioned the feasibility of asking TikTok to implement lesser measures, like disclosing its data and content moderation practices. As Rao and Srinivasan noted, this approach would rely on trusting a company the government suspects of being controlled by a foreign adversary, the report noted. At the end of TikTok's argument, Ginsburg disputed the social media giant's counsel Andrew Pincus' claim that the law targets the company. The judge explained that it applies to foreign-controlled firms and highlighted one facing urgent action after years of stalled negotiations. The judges also raised doubts about whether creators genuinely have a First Amendment stake in TikTok's ownership. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Why It Matters: Earlier in June, TikTok argued that the U.S. could have considered alternatives to banning the app to address national security concerns. TikTok's lawyers stated that the company had negotiated a 90-page national security agreement with the US government offering "multi-layered safeguards and enforcement mechanisms," which Congress disregarded when enacting the TikTok ban. Last week, it was reported that TikTok is strengthening its relationship with Amazon.com Inc. sparking rumors of a potential acquisition. TikTok's parent company ByteDance previously said that it would not be seeking a buyer for the social media giant. In a court filing, TikTok also said, "The Chinese government has made clear that it would not permit a divestment of the recommendation engine that is a key to the success of TikTok in the United States." Photo by XanderSt on Shutterstock Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Google Co-Founder Sergey Brin Admits Company Was 'Too Timid' To Rollout ChatGPT-Like LLMs Despite Basically Inventing Them Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Free speech? TikTok in court to argue against U.S. ban

What are the boundaries of the First Amendment? That's a question that continues to be asked in the 21st century, as the tech revolution evolves from the dot-com era to social media and generative AI. At the forefront of the latest free speech discussion is TikTok, which has exploded in popularity in recent years and now has 170M users in the U.S. The app, however, is owned by Chinese parent ByteDance (BDNCE), prompting serious concerns that it can be used for espionage or algorithmic propaganda manipulation. Others call the worries overblown, even likening them to a new Red Scare. Flashback: Former President Donald Trump sought to ban TikTok and force a sale of its U.S. business to an American company, and while a transaction with Oracle (ORCL) almost went through in 2020, the lawsuits piled up and an injunction was granted to prevent the app from being outlawed. The Biden administration later revoked the planned ban, but their positions on the matter have since reversed following a national security review. President Biden signed the PAFACA Act in April, which effectively banned TikTok in the U.S. by 2025 (unless it was divested), while Trump has vowed to "save TikTok in America" after calling Facebook (NASDAQ:META) the "enemy of the people." Things are now being hashed out in the legal system, where the case was presented before a three-judge panel in the U.S. Court of Appeals. "For the first time in history, Congress has imposed [an] extraordinary speech prohibition based on indeterminate future risks," argued Andrew Pincus, a partner at Mayer Brown representing TikTok. "Data would be extremely valuable to a foreign adversary trying to compromise the security states, [for] knowing what Americans' patterns are, who their contacts are, where they go, who they interact with, and what sorts of content interests them," countered DOJ lawyer Daniel Tenny, adding that much of the government's evidence is under seal as it could harm national security. Outlook: The battle is likely to end up at the Supreme Court, which would decide on remedies or uphold a ban that may benefit rivals like Instagram Reels (META), YouTube Shorts (NASDAQ:GOOG) (NASDAQ:GOOGL) and Snapchat Spotlight (NYSE:SNAP). China has warned that any "such practice of resorting to hegemonic moves" would "inevitably come back to backfire on the United States itself," though it's important to note that Beijing doesn't allow any American social media companies to operate within its borders. More importantly, the case will cement the U.S. national security playbook for dealing with China, which has already seen trade wars, export curbs and a heavy dose of protectionism. More on TikTok Montana's state-wide ban on TikTok blocked by federal judge TikTok parent ByteDance has reportedly approached banks for $9.5B corporate loan TikTok disputes US claims on ties with China in court filing Over 50 U.S. lawmakers and 21 states back DoJ's defense in TikTok ban Amazon to let TikTok users shop select products without leaving the video app

Wall Street Breakfast: TikTok Fate

What are the boundaries of the First Amendment? That's a question that continues to be asked in the 21st century, as the tech revolution evolves from the dot-com era to social media and generative AI. At the forefront of the latest free speech discussion is TikTok, which has exploded in popularity in recent years and now has 170M users in the U.S. The app, however, is owned by Chinese parent ByteDance, prompting serious concerns that it can be used for espionage or algorithmic propaganda manipulation. Others call the worries overblown, even likening them to a new Red Scare. Flashback: Former President Donald Trump sought to ban TikTok and force a sale of its U.S. business to an American company, and while a transaction with Oracle (ORCL) almost went through in 2020, the lawsuits piled up and an injunction was granted to prevent the app from being outlawed. The Biden administration later revoked the planned ban, but their positions on the matter have since reversed following a national security review. President Biden signed the PAFACA Act in April, which effectively banned TikTok in the U.S. by 2025 (unless it was divested), while Trump has vowed to "save TikTok in America" after calling Facebook (META) the "enemy of the people." Things are now being hashed out in the legal system, where the case was presented before a three-judge panel in the U.S. Court of Appeals. "For the first time in history, Congress has imposed [an] extraordinary speech prohibition based on indeterminate future risks," argued Andrew Pincus, a partner at Mayer Brown representing TikTok. "Data would be extremely valuable to a foreign adversary trying to compromise the security states, [for] knowing what Americans' patterns are, who their contacts are, where they go, who they interact with, and what sorts of content interests them," countered DOJ lawyer Daniel Tenny, adding that much of the government's evidence is under seal as it could harm national security. Outlook: The battle is likely to end up at the Supreme Court, which would decide on remedies or uphold a ban that may benefit rivals like Instagram Reels (META), YouTube Shorts (GOOG, GOOGL) and Snapchat Spotlight (SNAP). China has warned that any "such practice of resorting to hegemonic moves" would "inevitably come back to backfire on the United States itself," though it's important to note that Beijing doesn't allow any American social media companies to operate within its borders. More importantly, the case will cement the U.S. national security playbook for dealing with China, which has already seen trade wars, export curbs and a heavy dose of protectionism. Amazon (AMZN) workers will soon return to the pre-COVID setup of being in the office five days a week, according to a letter from CEO Andy Jassy issued to employees. "Before the pandemic, it was not a given that folks could work remotely two days a week, and that will be true moving forward - our expectation is that people will be in the office outside of extenuating circumstances or if you already have a Remote Work Exception approved," he wrote. Amazon will also bring back assigned desk arrangements in certain locations and cut down the number of managers on teams. (77 comments) Cuba has reduced the size of its subsidized bread rations for citizens after the country ran short of wheat flour. The move comes against the backdrop of food shortages and a deepening economic crisis that has led to the exodus of almost half a million Cubans to the U.S. over the last two years. The bread ration is part of a decades-old subsidy scheme created by the late Fidel Castro for deeply discounted necessities, though the government currently provides only a fraction of the products under the program, which often arrive late and are of poor quality. (4 comments) Tupperware Brands (TUP) is reportedly preparing to file for bankruptcy as soon as this week and is planning to enter court protection. The preparations come after protracted negotiations between the company and lenders over how to manage its over $700M debt load. Demand has waned significantly in recent years and company announced in June that it will close its last remaining U.S. factory. The brand has also been impacted by intense competition, bad management decisions, a lack of innovation and its reliance on direct sales. (6 comments)