UPDATE (Aug. 25): Bytedance filed a lawsuit early Monday challenging an Aug. 6 executive order forbidden transactions with popular social media app Tiktok. We’re updating the story with new details of the legal argument from the complaint. Bytedance argues that the executive order was issued without evidence or due process, and that the company’s previously provided documentation was “sufficient to address any conceivable US government privacy or national security concerns.”

  • Tiktok maintains that they have taken extraordinary measures to protect US user data and have fully complied with a 2019 investigation by the Committee on Foreign Investment in the United States.
  • The complaint further argues the executive order violates the fifth amendment, misuses the International Emergency Economic Powers Act, and jeopardizes up to 10,000 planned US jobs. 
  • “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,” Tiktok said in their Monday press release. 

Chinese Foreign Ministry spokesperson Zhao Lijian criticized the Wechat and Tiktok restrictions at a Monday press conference (Chinese), saying China supports companies “taking up legal weapons to safeguard their legitimate rights and interests” and that the American politicians pursuing the bans were “full of lies and slander.”

Tiktok parent Bytedance said Sunday said it would file a lawsuit as early as Monday against the US government over an executive order banning transactions with the popular Chinese-owned video-sharing app.

Why it matters: The lawsuit does not address forcing the sale of Tiktok to an American buyer because it doesn’t target the executive order signed by the US President Donald Trump on Aug. 14 ordering the divestiture. However, it may become a bargaining chip for the company in talks with potential buyers such as Microsoft and Oracle.

  • The executive order gives Bytedance 90 days to either sell or spin off its US operation of Tiktok. The order is not subject to legal judicial review, according to Reuters.

Details: Bytedance said in a statement (in Chinese) issued on Sunday that it would sue the US government on Monday to “make sure the company and its users are fairly treated.”

  • The company said in the statement that the Trump administration had “dismissed reality” (our translation) and failed to adhere to the due process of law, but it didn’t elaborate.
  • “Even though we strongly disagree with the administration’s concerns, for nearly a year we have sought to engage in good faith to provide a constructive solution,” the company said.
  • Reuters first reported on Bytedance’s plan to file the lawsuit on Saturday, citing anonymous sources as saying that the legal challenge pertains to an executive order which Trump issued on Aug. 6.

Context: Trump signed two executive orders on Aug. 6 banning “any transaction” between any person or company under US jurisdiction and Bytedance as well as Chinese instant messaging app Wechat starting Sept. 15.

  • The orders faced its first legal challenge when a group of Chinese American lawyers announced on Aug. 8 that it would file lawsuits against Trump’s executive order involving Wechat. Some of the lawyers formed a non-profit organization, US Wechat Users Alliance, to assist fundraising efforts to file suits in multiple locations. 
  • The group said Friday it will file a federal action against Trump and Wilbur Ross, the US Secretary of Commerce, in the US District Court for the Northern District of California, seeking to prevent the Aug. 6 executive order from banning the use of Wechat in the country by individual users and businesses.

This piece was updated Aug. 25 with details of Bytedance’s complaint.

Writing about semiconductors and telecommunications.