On August 24, 2020, TikTok Inc. and its Chinese parent, ByteDance, Ltd., filed suit in the Central District of California against President Donald J. Trump, Secretary of Commerce Wilbur Ross and the U.S. Department of Commerce, in an effort to prevent the government from banning its video-sharing mobile application pursuant to the Executive Order issued on August 6, 2020, which broadly prohibits transactions by any person related to TikTok, ByteDance and any of its subsidiaries. The president’s order had determined that the “spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States.” In the filed complaint, TikTok and ByteDance seek injunctive and declaratory relief and argue that the Executive Order violates their constitutional rights, and is not authorized by the International Emergency Economic Powers Act (IEEPA), upon which it is based.
More specifically, TikTok and ByteDance maintain that the app does not present “an unusual and extraordinary threat,” as required by law, and that the “executive order is not rooted in bona fide national security concerns,” making it ultra vires or an act beyond the authority granted to the president by IEEPA. Instead, the complaint states that the ban was issued by the president “for political reasons rather than because of an ‘unusual and extraordinary threat’ to the United States.” The complaint contains seven counts against the defendants, two for violations of the Fifth Amendment’s due process and takings clauses, one for violation the First Amendment’s freedom of speech clause, and four for violations of IEEPA. TikTok has issued a statement in support of its lawsuit explaining its previous efforts to cooperate with the Committee on Foreign Investment in the United States (CFIUS).
The complaint comes 10 days after another Executive Order issued on August 14, 2020 directing the 2017 transactions that resulted in the acquisition of Musical.ly, now TikTok, by ByteDance be unwound for similar national security reasons. For more information on the August 14, 2020 Executive Order or the August 6, 2020 Executive Order, please see our updates dated August 17, 2020 and August 7, 2020, respectively.